Price Hikes and Secret Deals
Drug pricing games explained
The drug supply chain is opaque and complex. Prescription drugs cost dollars one day and hundreds the next, but why is this happening? Pharmacy benefit managers (PBMs), pharmaceutical companies and health insurers often manipulate drug prices to their advantage. Learn more about how the negotiations happening behind closed doors are impacting drug prices.
Meet the key players
PBMs are the middlemen between pharmaceutical companies and health insurers that claim to save patients money by negotiating deals to save on drug costs. These middlemen don’t share the terms of their agreements and it’s unknown if savings ever reach patients. As they increasingly act in their own self-interest, drug prices rise and patients’ access to care suffers, potentially resulting in patients often skipping doses or abandoning treatments altogether.
Health insurance companies approve treatments, set copays and – alongside PBMs – decide how much patients will pay for their medications. Insurers often reimburse PBMs a higher price for generic drugs than what the PBMs pay pharmacies for the same drugs.
Pharmaceutical companies make drugs with little to no explanation as to how or why they price their products. They excessively manipulate the patent system to extend their patents and keep generic competition away. This game keeps the prices of their medications high, often at the expense of the patient.
Patients deserve drug price transparency
Due to the opaque, scheming practices in the drug-pricing system, patients face limited access options, delays and prohibitively high prices for their medications – and the profit-driven players escape without consequence. Patients, physicians and health care organizations have been demanding action to increase drug price transparency and insight into the process that affects their access to care. Learn about how we can hold pharmaceutical companies, health insurers and PBMs accountable and take action today.
To empower patients and address health care costs, the American Medical Association (AMA) encourages prescription drug price and cost transparency among pharmaceutical companies, PBMs and health insurers. Learn more about our recent advocacy efforts and the policy solutions we’re supporting.