A quick roundup of the issues driving the healthcare reform conversation.
Week in Review
PBM VALUE Expert analysis highlights the importance of PBMs in the prescription drug supply chain.
Quick takeaway: A new report counters the political rhetoric targeting pharmacy benefit managers (PBMs) by pointing out the value they bring to consumers and our healthcare system.
Digging deeper: With so much legislative and regulatory attention focused on PBMs, stakeholders continue defending the critical role they play in driving affordability, patient safety, and better health outcomes.
Last week, former chief economist for the U.S. Department of Justice Antitrust Division, Dennis Carlton, Ph.D., released a report concluding that PBMs not only encourage greater competition, but lower drug costs, as well. Also included in the analysis:
- PBMs drive down costs for health plan sponsors, patients, and families
- Rebates and PBM-affiliated pharmacies are not increasing drug costs
- PBMs do not put independent pharmacies out of business
What it means: Big Pharma has effectively manipulated focus away from themselves by targeting other parts of the drug supply chain, distracting from the fact that they alone are responsible for setting prescription drug prices.
Rx PRICE HIKES Drugmakers raise prices on hundreds of products.
Quick takeaway: In what’s become a twice-yearly tradition, pharmaceutical manufacturers unleash their second flurry of price hikes in 2024.
Digging deeper: Every January, drugmakers greet the New Year by increasing prices on hundreds of drugs – such as, earlier this year when more than 900 drugs saw price increases.
In keeping with their pattern of biannual increases, nearly 200 drugs just had their prices go up earlier this month, with half of those increases exceeding the rate of inflation.
What it means: As highlighted above, the drug industry continues to exert sole influence on the trajectory of drug prices. And, they’re willing to do whatever it takes to protect their ability to charge whatever they want.
SPENDING Medical cost growth is projected to hit its highest level in more than a decade.
Quick takeaway: Commercial healthcare spending is expected to grow 8 percent in 2025.
Digging deeper: As featured in last week’s newsletter, forecasts show healthcare spending continuing its upward climb. A new analysis provides further insight, showing that year-over-year medical cost trend is expected to rise to a level that hasn’t been seen in 13 years.
According to the research, what’s driving this trend is inflationary pressure, combined with prescription drug spending and behavioral health utilization.
What it means: Significantly, the report highlights that hospital and provider consolidation, which is becoming increasingly common, is one of the primary factors inflating costs. This is playing out in the ongoing contract negotiations between health plans and providers across the country.
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