Researchers Show Manufacturer Discounts to PBMs, Insurers Have Soared

The discounts drug manufacturers are forced to offer pharmacy benefit managers (PBM) and insurance companies on their products are driving the sharp rise in drug prices, according to a study published Wednesday in JAMA Network Open.

Pharmaceutical pricing researchers Sean Dickson and colleagues showed that the secrecy-enshrouded discounts that manufacturers of leading insulin products grant to insurers and PBMs soared from $3.5 billion in 2012 to $16.4 billion in 2019, cuts that represent the biggest discounts the companies offer to any entity.

At the same time, mandatory discounts under federal programs, including the Medicare Part D coverage gap, Medicaid and 340B, remained flat, showed the researchers.

This PBM picture is vastly out of balance, wrote William Feldman and Benjamin Rome of Brigham and Women’s Hospital in an editorial on the study, also published Wednesday on JAMA Network Open.

“The current system of opaque prices due to confidential rebates and the resulting gross-to-net price bubbles pose a barrier to a well-functioning pharmaceutical marketplace,” they wrote. “Ultimately, to better protect patients and improve the affordability of essential medications, like insulins, policy makers should strive for more transparency” in how these discounts are negotiated.

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