Purdue Pharma, the manufacturer of OxyContin, thwarted the state’s plan by paying a middleman, known as a pharmacy benefits manager


Purdue Pharma pays off pharmacy benefit managers [PBMs] responsible for ensuring favorable treatment for OxyContin with rebates they a greed to make the drug available without prior authorization and with low copayments.

Drug Pricing

the pharmacy benefits management model – their role in drug pricing – who tracks drug distribution?
In their contracts with drug makers, a PBM may classify a rebate they’ve negotiated as a type of fee, allowing them to keep it rather than pass it on to their clients, according to Linda Cahn, an attorney who advises health plans. This places the client at a big disadvantage because the contracts are proprietary, which makes it hard to know what the rebates really look like in the first place.
Similarly, contracts may also allow PBMs to loosely define what is considered a brand-name or generic drug. As a result, some may be incorrectly categorized, which means clients may not receive appropriate discounts. And the difference can be substantial. Cahn said average discounts for brand drugs range from 15 percent to 21 percent, and average discounts for generics run from 72 percent to 82 percent. “The PBMs play a labeling game,” she explained. “So the clients have no idea how much money they are leaving on the table.”

The largest PBM’s are Express Scripts, CVS Caremark and United Healthcare’s OptumRX — which collectively manage about 70 percent of the pharmacy benefits in the United States.

PBMs = Middle Men = Rebates Scam
$3 billion per year on pharmaceuticals.
these companies stand at the crossroads where lists of preferred medicines are compiled for health plans and prices for these drugs are negotiated. A key issue is the extent to which pharmacy benefits managers are transparent about rebates that are received and passed to clients.

Health Transformation Alliance wants to rewrite  their contract with a PBM company to eliminate any undisclosed drug company rebate that a PBM might keep for themselves.


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