{"id":2125692,"date":"2023-12-15T03:20:02","date_gmt":"2023-12-15T08:20:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/cvss-shift-in-drug-markups-could-stop-big-pharmas-price-gouging\/"},"modified":"2023-12-15T03:27:31","modified_gmt":"2023-12-15T08:27:31","slug":"cvss-shift-in-drug-markups-could-stop-big-pharmas-price-gouging","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/cvss-shift-in-drug-markups-could-stop-big-pharmas-price-gouging\/","title":{"rendered":"CVS&#8217;s new drug pricing strategy may curb Big Pharma&#8217;s price gouging"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fcvss-shift-in-drug-markups-could-stop-big-pharmas-price-gouging%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2125692&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"article-content\">\n<h2 class=\"wp-block-heading\">Americans Receive Good News on Inflation and Prescription Drug Pricing<\/h2>\n<p>Believe it or not, Americans just might have received some good news\u200b on the inflation and prescription \u2062drug pricing \u200dfront. But despite what the left might want to claim, the price\u200d controls included in \u2064Democrats\u2019 \u200bInflation (Reduction) Act had nothing to do with it.<\/p>\n<p>The Wall Street\u200b Journal recently <a href=\"https:\/\/www.wsj.com\/health\/healthcare\/prescription-drug-costs-cvs-pharmacy-56acb623?mod=trending_now_news_5\" target=\"_blank\" rel=\"noreferrer noopener\">broke the news<\/a> that pharmacy \u2063giant CVS\u200b Health is about to change its pricing model. Over time, an industry leader\u2019s move to a more transparent way of pricing \u200cprescription\u2064 drugs could lead to a simpler system \u2014 and real savings for patients.<\/p>\n<div class=\"fdrlst__b89e9-paragraph-2-long d-flex justify-content-center\" style=\"margin-left: auto; margin-right: auto; text-align: center; \" id=\"fdrlst__b89e9-1399135498\">\n<div id=\"div-gpt-ad-1379703300879-0\" class=\"mb-30\"><\/div>\n<\/div>\n<div class=\"fdrlst__b89e9-fd26d9458d0235614e1160a98357924a fdrlst__b89e9-paragraph-2\" id=\"fdrlst__b89e9-fd26d9458d0235614e1160a98357924a\"><\/div>\n<h2 class=\"wp-block-heading\">An Opaque System of\u200c Rebates<\/h2>\n<p>Before analyzing CVS\u2019s\u2062 move, it\u2019s worth \u200bdissecting the\u2064 <a href=\"https:\/\/thefederalist.com\/2019\/04\/12\/trump-administration-plans-bail-insurers-hide-higher-drug-costs\/\" target=\"_blank\" rel=\"noreferrer noopener\">current system of drug pricing<\/a>. \u200dRight now, most pharmaceutical benefit managers (PBMs) \u2014 which includes CVS \u2014 focus on achieving high rebates for \u2062their insurer customers.<\/p>\n<p>For instance, a drug could\u200d have a public \u200d\u201clist price\u201d of\u2063 $100, but the pharmaceutical company will pay the PBM a rebate of $60, lowering the net cost\u200d of the drug to $40. It sounds like the rebates bring\u2064 down the price of drugs, but this system comes\u200d with some big catches.<\/p>\n<p>For starters, patients\u2019 co-payments or \u200cco-insurance for the drug get tied to the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/what-you-need-to-know-about-trumps-latest-drug-pricing-moves\/\" title=\"What You Need To Know About Trump\u2019s Latest Drug Pricing Moves\">higher list price<\/a>. To\u2064 continue the example above, a\u200d 20 percent co-insurance on a $100 list \u200dprice will obviously cost a patient \u200cmore\u2063 at the pharmacy counter than 20 percent co-insurance on the lower net price of $40.<\/p>\n<p>PBMs generally do pass through rebates to patients, but via lower <em>premiums<\/em>, not lower <em>cost-sharing<\/em>. (PBMs can also take \u200ba share of the rebates for their own bottom \u2064lines in some cases.) This dynamic results in a rather perverse outcome. Those with the highest out-of-pocket drug costs pay more for their prescriptions so that all enrollees\u2062 (including healthy ones) can enjoy lower insurance premiums.<\/p>\n<div class=\"fdrlst__b89e9-698d78d062cd453f80c5cefd1121cc36 fdrlst__b89e9-paragraph-6\" id=\"fdrlst__b89e9-698d78d062cd453f80c5cefd1121cc36\"><\/div>\n<p>Moreover,\u2062 all these opaque rebates\u2062 have \u200dturned the drug pricing system into \u2064a complicated mess, one that overcharges \u200bpatients due to this secrecy.\u2063 Several years ago, I <a href=\"http:\/\/thefederalist.com\/2018\/09\/20\/senate-republicans-refuse-let-states-control-price-shopping-prescription-drugs\/\" target=\"_blank\" rel=\"noreferrer noopener\">realized<\/a> I could \u200bsave hundreds of dollars on prescription drugs by <em>not<\/em> using my health insurance. Instead, I pay using cash and a drug discount program like GoodRx. I realized this savings because my insurer\/PBM had an\u200c incentive\u200c to keep list prices high. In plain English, my insurer \u2064overcharged me for my prescriptions so it could collect big rebates from drug\u2063 companies.<\/p>\n<h2 class=\"wp-block-heading\">A Simplified Model<\/h2>\n<p>CVS announced that, over the coming \u200dmonths, it wants to do away\u2063 with this model and make its charges more transparent to customers. In so doing, it is following the lead of the Cost Plus Drug Company, established by Dallas Mavericks owner\u2062 Mark Cuban.<\/p>\n<p>Cost Plus works using its eponymous pricing formula as laid out on its website. For every drug, the \u200ccompany breaks out the <a href=\"https:\/\/costplusdrugs.com\/medications\/azelastine-fluticasone-137-50mcg-act-nasal-spray-23-dymista\/\" target=\"_blank\" rel=\"noreferrer noopener\">components of a given prescription charge<\/a>:<\/p>\n<ol>\n<li>manufacturing costs<\/li>\n<li>a roughly 15 percent markup<\/li>\n<li>a $5 pharmacy dispensing fee<\/li>\n<li>a $5\u2063 standard shipping fee<\/li>\n<\/ol>\n<p>This method of completely transparent pricing aligns incentives properly. Cost Plus \u2063doesn\u2019t have a\u200d reason to jack up list\u200d prices for customers on the front end, so that someone else (i.e., a\u2063 pharmaceutical company) can \u201cscratch their back\u201d via rebates on the back end of \u200bthe transaction.<\/p>\n<h2 class=\"wp-block-heading\">Market Reforms\u200d Work<\/h2>\n<p>Overall, \u200cthe announcement from\u200b CVS shows that pressure from the combination \u200bof a new market entrant (Cost Plus Drugs) and investigations\u200d by Congress into PBMs\u2019 business practices have moved the marketplace in a positive direction. \u200bOne expert interviewed by the Journal called the move \u201ca fundamental change in how pharmacy services are priced\u201d and \u201ca legitimate step\u2063 toward \u200ctransparency.\u201d<\/p>\n<p>If other companies follow CVS\u2019s lead, patients should benefit from lower \u2062prices. In some cases, they may pay more for a given prescription\u200c or two, but overall prices should stabilize and even move down.<\/p>\n<p>Just as important, the system will\u200c become more efficient. Patients will obtain these savings without having to \u2063resort to kludgy and cumbersome solutions, like having \u2062to print out GoodRx coupons instead of using their own health insurance to save money at the pharmacy counter.<\/p>\n<p>The CVS\u200c announcement is <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/chilean-voters-reject-socialist-constitution\/\" title=\"Chilean Voters Reject Socialist Constitution\">genuinely good news<\/a> for patients \u2062suffering from the sting of high drug prices. Even\u200d better, the news came without involving the heavy hand of \u2063government bureaucrats and price controls, making it the rare health \u2063care reform conservatives can whole-heartedly \u2064support.<\/p>\n<div class=\"fdrlst__b89e9-cfa2a271bd5ecb777074b3a0132b5a81 fdrlst__b89e9-after-post-content\" id=\"fdrlst__b89e9-cfa2a271bd5ecb777074b3a0132b5a81\"><\/div>\n<hr class=\"wp-block-separator\">\n<\/div>\n<p> <\/p>\n<h2> What is the current \u2064pricing model used by\u200d most pharmaceutical benefit managers (PBMs) like\u200b CVS, and what\u2062 are the drawbacks of this system?<\/h2>\n<p><span>  Americans have received some positive news regarding inflation and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-gets-more-bad-news-from-another-democrat-senator-about-his-3-5-trillion-wish-list-report\/\" title=\"Biden Gets More Bad News From Another Democrat Senator About His .5 Trillion Wish List: Report\">prescription drug pricing<\/a> recently. A\u2062 recent article\u200d in The Wall \u200bStreet Journal reported that CVS Health,\u200b a prominent\u200c pharmacy company, is about to change\u200c its \u2063pricing model. This move could potentially lead \u200cto\u2064 a more simplified system and \u200creal savings for patients.<\/p>\n<p>Before\u2062 analyzing CVS&#8217;s decision, it is essential to understand the current system \u200bof\u2064 drug pricing.\u200d Currently,\u2062 most pharmaceutical benefit managers (PBMs), \u200cincluding CVS, focus on obtaining high rebates for their insurer customers. For example, a drug may have a\u200c public \u2062&#8221;list\u2063 price&#8221; of $100, but the\u2063 pharmaceutical company\u200d pays \u200dthe PBM a rebate of \u2063$60, lowering the net cost to $40. At first glance, it seems like \u2062the rebates reduce the price of drugs. \u200bHowever, this system has some significant drawbacks.<\/p>\n<p>One problem is that patients&#8217; co-payments \u2063or co-insurance for the drug are tied to the higher list price. For instance, a 20% co-insurance on\u2062 a $100 list price will cost a patient \u2062more at \u200cthe pharmacy counter compared to the\u200c 20%\u2064 co-insurance on the lower\u2064 net \u2064price of $40. Although PBMs do pass on rebates to patients, they do so \u200bthrough\u200c lower premiums, not\u2064 lower cost-sharing. In\u2063 some cases, PBMs also keep a share of \u200cthe rebates for their own profit margins. This dynamic results in\u2064 an unjust outcome where those with high\u2064 out-of-pocket drug costs pay more for their prescriptions to benefit all \u2062enrollees, including healthier individuals, with lower insurance premiums.<\/p>\n<p>Furthermore, the system of opaque rebates has made the drug pricing process complex and overcharges patients due to the \u200dlack of transparency. As a result, several years ago, I discovered \u2063that I could save \u2064hundreds \u200bof dollars on\u2064 prescription drugs \u200dby not using\u2063 my health insurance and instead paying with cash and a drug\u2064 discount program like GoodRx. This realization occurred because my insurer and PBM had an incentive to keep list prices high, meaning they overcharged me for prescription drugs to collect \u2062significant\u2063 rebates from pharmaceutical companies.<\/p>\n<p>In contrast, CVS&#8217;s recent announcement suggests a shift towards\u200d a more simplified \u2064and transparent model. The company plans to make its charges more transparent \u200dto customers over\u2062 the coming\u200d months, following the \u2063lead of the \u2062Cost \u2064Plus Drug\u2064 Company established\u2064 by Mark Cuban, owner of the Dallas Mavericks. \u200dThis company uses a pricing formula \u200cthat breaks \u200bdown the cost of \u2064each drug,\u200c providing customers\u2064 with a clearer understanding of the charges.<\/p>\n<p>In conclusion, the news about CVS&#8217;s change in pricing model offers hope for Americans regarding inflation \u200dand prescription drug pricing. By simplifying the system and increasing transparency, patients may\u2062 see real savings \u200bin the future. It is essential for other industry leaders to follow suit\u2062 and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/california-mandates-vaccine-or-testing-for-state-employees-health-care-workers\/\" title=\"California Mandates Vaccine Or Testing For State Employees, Health Care Workers\">adopt similar measures<\/a> to \u200densure fair drug pricing and improved affordability for all.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Believe it or not, Americans may have received positive news regarding inflation and prescription drug pricing. However, the left&#8217;s claims that the Democrats&#8217; Inflation (Reduction) Act&#8217;s price controls were responsible for this are unfounded. The Wall Street Journal revealed that a pharmacy giant recently made significant changes, contributing to the improvement<\/p>\n","protected":false},"author":521,"featured_media":2125693,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[546],"tags":[],"class_list":["post-2125692","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-federalist"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2125692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2125692"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2125692\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2125693"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2125692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2125692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2125692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}