There’s growing recognition that middlemen, like PBMs and 340B hospitals, mark up medicines, leaving patients paying more. In fact, America is the only country in the world where half of every dollar spent on brand medicines goes to entities that don’t make them.
That’s why some biopharmaceutical companies are making it easier for patients to buy directly and at a lower cost. Direct purchase programs allow patients, caregivers and employers to buy prescription drugs at a transparent price, and without markups that can result in patients paying more out of pocket.
In January, PhRMA will launch AmericasMedicines.com to connect patients, caregivers and employers with direct purchase programs and other cost support resources offered by manufacturers. While companies must make their own decisions to offer these programs and determine how they will work, the website will make it even easier for Americans to find these convenient, transparent programs.
We are also investing in cures here at home. PhRMA member companies are delivering a record $500B in new U.S.-based manufacturing and infrastructure, which injects $1.2T into the U.S. economy and creates 100,000+ new jobs.
But there’s the other half: For every dollar spent on brand medicine, 50 cents goes to an entity that didn’t make it. The reality is spending on medicines is padding the profits of middlemen, often at the expense of patients.
- PBMs refuse to share savings with patients. PBMs and insurers get billions in rebates on medicines that can reduce the cost of brand medicines by 50% or more. Yet, they often fail to pass those savings directly to patients. As a result, patients can pay more for medicines than middlemen.
- 340B hospitals charge big medicine markups. Big, tax-exempt hospitals and clinics purchase medicines at prices that can be as low as a penny. They then turn around and may mark up medicines by thousands of dollars. They get away with this by exploiting, sometimes illegally, the 340B hospital markup program. 340B medicine markups are a hidden tax for patients, employers and taxpayers.
It's time for Washington to act: The biopharmaceutical industry is doing our part by improving access for patients and investing in communities across the country. But we can’t do it alone.
Addressing what patients pay for their medicines must include addressing where half of brand medicine spending is going. As policymakers continue to look for ways to fix rising health care costs and spending on medicines, they must end middlemen markups and put American patients first.
Elise Shutzer
Elise Shutzer currently serves as Vice President of Public Affairs at PhRMA, leading issue communications for key topics including cost and access, hospitals, as well as strategic insights which oversees polling and message research activities. Shutzer is a seasoned leader with extensive experience in public policy advocacy, grassroots and public affairs. She most recently served as the Global Corporate Issue Head for Sustainability and Circularity at ExxonMobil leading advocacy campaigns on plastic waste, the circular economy and other environmental issues. Previously, Shutzer ran the energy and environmental grassroots and coalition development program at The Pew Charitable Trusts, and she spent over a decade at the Dewey Square Group, a prominent public affairs and communications firm.
Elise Shutzer