Jan 18, 2017

New PhRMA drug price report points finger at middleman and insurers


A new report commissioned by the Pharmaceutical Research and Manufacturers of America breaks down U.S. spending on prescription drugs, showing that brand drugmakers keep only 39 percent of payments (based off of list prices) at the point of sale.

A few other takeaways from the report:

  • Of the remaining spending, 22 percent goes to the supply chain, or middlemen.
  • Another 20 percent goes to stakeholders like insurers and the government through rebates, discounts and fees.
  • The other 19 percent goes to generic companies.
  • When rebates, fees and discounts are taken into account, brand drug manufacturers kept only $219 billion of the $469 billion spent on drugs in the United States in 2015.

Why this matters: The pharmaceutical industry has been in the spotlight for rising prescription drug prices for the last year or so, but it wants to at least share the blame. This report helps show where all the money is going, giving the industry some ammo behind its claims that list prices don't tell the full picture.

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