FEEDBACK:  Jury out on pharma middlemen; More rural scholarships needed

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PBMs aren’t all they’re cracked up to be

To the editor:

I was surprised by your [op-ed] piece on pharmaceutical benefits managers.  PBMs are the middlemen in the purchasing of pharmaceuticals from drug companies, that then oversee their pricing, distribution and sales through pharmacies, government health programs and health insurance carriers.  Their purpose originally was that of an advocate for states and their citizens in keeping drug prices reasonable for their citizens.

However, PBMs eventually became 800-pound gorillas in the Big Pharma world, lacking transparency or serious accounting to anyone except their stockholders who were thrilled with their double-digit annual growth and rising stock prices.

Less enchanted were PBM customers and their consumers who had no way of knowing if the retail prices they were paying were reflective of the actual costs of production and distribution.  Much of the blame lay with the lack of transparency in their deals with drug manufacturers, who did not have to disclose pricing data or the unpublicized side deals they cut with PBMs for pushing their products.  Even today, there is not enough public information about drug pricing for anyone to figure out how much it costs manufacturers to make a single pill and distribute it.  Consumer groups have been repeatedly frustrated by reports of significant incentive deals and kickbacks to PBMs from manufacturers, most of which add to the cost of drugs but few of which are required to be made public.

In 2014, USA Today did some groundbreaking work on this, reporting that: “The PBMs’ cut of transactions can double drug costs for consumers or employers. A month’s supply of a 20 milligram dose of Lipitor cost consumers or their employers $21.60, according to an audit of a PBM contract done recently by Pharmacy Outcomes Specialists, which represents companies, managed care organizations, unions and government agencies. The drugstore was reimbursed $10.83, so the PBM kept $10.77. For a month’s supply of a 10 mg dose of Ambien, the consumer/company cost was $5.65, the pharmacy got $1.88 and the PBM retained $3.77.”

A kickback scheme in Texas resulted in the conviction of the president and CEO of one of these PBMs earlier this years: https://www.justice.gov/usao-edtx/pr/former-ceo-nebraska-pharmaceutical-benefits-manager-guilty-kickback-scheme

Dr. Pezalla correctly describes the potential for PBMs in controlling the spiraling costs of health care …. but the jury is still out on whether they are the problem or part of the solution.

— Steve Skardon Jr., Mount Pleasant, S.C.

More college scholarships to top students will help rural areas

To the editor:

On your story about S.C. disproportionately funding merit-based scholarships:  Make the top seven graduates of each high school automatically qualified.  This will be helpful in many predominantly low-income high schools in rural counties.

— Jack Bass, Charleston, S.C.

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