Health insurance companies are notorious for exploiting prior authorization schemes to avoid paying for care and have denied claims at alarming rates in recent years.
However, corporate consolidation of industry “middlemen” that experts say are partially to blame for the prescription drug affordability crisis has received less scrutiny from the general public,
despite efforts by lawmakers and the Federal Trade Commission (FTC) to shine light on the notoriously opaque and confusing corporate bureaucracy that determines the cost of medicine.
We often hear about Big Pharma selling drugs at high prices
and insurance companies dragging their feet when it comes time to pay the bill,
but the prices patients pay out of pocket for pharmaceuticals is largely shaped by the connective tissue between insurers and drug manufacturers: #pharmacy #benefit #managers, or PBMs.
PBMs have been around for decades, but the largest PBMs have merged with major insurance companies to form conglomerates,
including UnitedHealth Group’s #OptumRx.
In theory, PBMs negotiate discounts and rebates paid by drug makers that are passed onto insurance companies and their patients,
but the lack of transparency in that process has long frustrated lawmakers and regulators attempting to contain the skyrocketing cost of medicine.
The PBMs say their secret negotiations with drug companies make prescriptions more affordable for consumers,
but this system has not shown to protect patients from sticker shock at the pharmacy counter.
Nearly 30 percent of Americans say they haven’t taken prescribed medication due to cost,
and an estimated 1.1 million Medicare patients alone could die over the next decade because they cannot afford the drugs prescribed by their doctors,
according to the American Hospital Association.
The FTC reports that in 2023, the U.S. spent more than $722 billion on prescription drugs,
nearly as much as the rest of the world combined.
Clearly the system is not working for patients or public health,
and policy makers in both parties have increasingly focused on the PBMs
and their recent mergers with major insurance companies.
According to a two-year FTC investigation on health care conglomerates released in July,
PBMs are “powerful middlemen inflating drug costs and squeezing Main Street pharmacies.”
“We’ve heard accounts of how the business practices of PBMs may deprive patients of access to the most affordable medicines
and how doctors find themselves having to subordinate their independent medical judgment to PBMs’ decision-making at the expense of patient health,”
FTC Chair Lina Khan said in a statement at the time.
https://truthout.org/articles/its-not-just-denied-claims-insurance-firms-are-hiring-middlemen-to-deny-meds/
