Pharmaceutical industry

Pharmacy benefit managers pass along a lot of Medicare rebates

Prescription medicine staked on top of each other
Photo: Paul Linse/Getty Images

Pharmacy benefit managers negotiated $18 billion worth of rebates from drug manufacturers within Medicare’s prescription drug program in 2016, and they retained less than 1% of those rebates for themselves, according to a new Government Accountability Office report.

The big picture: This isn’t surprising, as Medicare is structured so that PBMs pass pretty much all rebates back to the federal government. While the GAO report offers a good base of how middlemen affect drug prices in Medicare, it does not fully address larger issues.

Why pharma doesn't invest in birth control

There hasn't been much innovation in women's birth control since the pill came to market nearly 60 years ago — because drug companies don't stand to make much from it, Bloomberg reports.

Where it stands: Only 2% of drug companies' annual revenue from contraceptives goes back into research and development, according to the Gates Foundation.