Reducing the number of companies between a product and a consumer

  • Merck CEO Kenneth Frazier thinks something has to change within the pharmaceutical industry to fix the issue of drug pricing.
  • “I don’t understand where we live in a world where 50% of the value goes to the supply chain, ” Frazier said at an event at the Economic Club of New York last week.
  • Merck has published reports outlining the company’s average list and net price increases for its products. Merck’s average net prices after factoring in those discounts decreased by 1.9% in 2017 as list prices increased 6.6%.

As I wrote yesterday, something has to give in the pharma-patient supply chain.  Merck’s CEO said “”I don’t understand where we live in a world where 50% of the value goes to the supply chain,”.  In this case he is spot on. However, pharma needs to do more to ensure that patients who need their drugs, and can’t afford them, receive them.

PBM’s do serve a purpose, but does that give them the right to take a big chunk of money  in the value chain? Most people would of course say “no”.   But then again social media are littered with comments from people who are having a hard time paying medication co-pays or for the medication themselves.

Of course in DTC ads we often hear “if you have a hard time paying for the medication XXXXX can help” but the process of reaching out to help from a drug company is lengthy and complicated.  This author fails to understand why a CEO led initiative to make it easier to get drugs for the financially strapped can’t be implemented.

Now for you pharma company haters out there remember that these companies have the right to make a profit and often put that as priority number one.  The belief that most pharma companies “care about you” is a pure canard.  However, that being said, PBM’s are reaching into your pocket with every new Rx hiding what they take and what is really paid for the drug.

Eliminating PBM’s and reducing the value chain is a great idea, but you had better believe that everyone who gets a piece of your healthcare dollar is going to fight tooth and nail to hold onto that money because American healthcare is just too profitable.

 

 

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