Nov 17, 2018

The drug price middlemen

Illustration: Sarah Grillo/Axios

We keep mentioning “middlemen” as part of the complex, expensive drug supply chain. They’re actually called pharmacy benefit managers, or PBMs, and their role in the system is both incredibly important and incredibly opaque.

How it works: PBMs are hired by an insurance company or a self-insured employer.

  • Their job is to take care of the prescription-drug coverage for that insurance plan, which includes negotiating with drug companies for discounted prices.
  • PBMs are a big part of the reason overall drug spending has held pretty steady lately, even as sticker prices rise.

The intrigue: PBMs do this through a complex system of rebates, in which they hang onto a percentage of the discounts they negotiate.

  • PBMs' primary business model is drawing increasing scrutiny, as critics suggest it gives them a perverse incentive to play along with higher drug prices. Ohio's Medicaid program, for example, recently forced its PBMs to move to a new system of fixed fees.

Axios was able to bring some light into the darkness of the PBM world earlier this year, after we obtained a copy of a contract template used by Express Scripts, the country’s biggest PBM.

  • That document helped illuminate the many subtle ways these companies are able to tilt the playing field in their favor as they work with employers and insurance plans.

Read the full investigation here to go deeper on a critical part of the health care industry.

Go deeper: Read the rest of Axios' Deep Dive on prescription drug prices

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Coronavirus dashboard

Illustration: Axios Visuals

  1. Global: Total confirmed cases as of 10 a.m. ET: 1,139,207 — Total deaths: 60,874 — Total recoveries: 233,807Map.
  2. U.S.: Total confirmed cases as of 10 a.m. ET: 278,537 — Total deaths: 7,163 — Total recoveries: 9,920Map.
  3. Public health latest: The CDC is recommending Americans wear face coverings in public to help stop the spread of the coronavirus. The federal government will cover the costs of COVID-19 treatment for the uninsured, Health and Human Services Secretary Alex Azar said.
  4. 2020 latest: "I think a lot of people cheat with mail-in voting," President Trump said of the 2020 election, as more states hold primaries by mail. Montana Gov. Steve Bullock said Friday that every county in the state has opted to expand mail-in voting for the state's June 2 primary.
  5. Business updates: America's small business bailout is off to a bad start. The DOT is urging airlines to refund passengers due to canceled or rescheduled flights, but won't take action against airlines that provide vouchers or credits.
  6. Oil latest: A pivotal Monday meeting among oil-producing countries to discuss supply curbs is reportedly being delayed amid tensions between Saudi Arabia and Russia.
  7. Military updates: Senators call for independent investigation into the firing of Navy captain of the U.S.S. Theodore Roosevelt. The U.S. military is struggling to find new recruits as enlistment stations are shut down.
  8. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Coronavirus reshapes American families

Illustration: Eniola Odetunde/Axios

It used to be scarce and hard-earned, but suddenly family time is abundant in the era of shelter-in-place.

Why it matters: For the first time since the early 19th century, many parents and kids — and even grandchildren — are all under the same roof round-the-clock. And if past periods of emergency are any guide, this enforced togetherness could deepen our relationships for years to come.

Go deeperArrow4 hours ago - Health

Biden says he's starting VP search this month

Joe Biden. Photo: Scott Olson / Staff

Joe Biden said he's spoken to Sen. Bernie Sanders and former President Barack Obama about selecting a running mate — and that he wants to build "a bench of younger, really qualified people" who can lead the nation over the course of the next four presidential cycles.

Driving the news: Biden spoke about the state of the 2020 race during a virtual fundraiser on Friday night that was opened to pooled coverage.