"Inside the Mafia of Pharma Pricing" is the latest from Matt Stoller’s excellent newsletter on monopolies, called simply, “Big”. This time Matt and his team turns their focus on Pharmacy Benefit Managers (PBMs), the money-sucking leeches that stand in the middle of drug price negotiation and manufacturer rebates. PBMs were once simple claim processors but as Big Pharma started to become conglomerates, these companies got bought up and consolidated into what is now basically a three horse race between CVS Caremark, Express Scripts (Cigna), and OptumRx (UnitedHealth Group). These companies are why people are paying exorbitant prices for drugs that they need for daily health, such as insulin, Gleevec, a life-saving drug for blood cancer, and drugs for people with inflammatory bowel disease (IBD).
I get a whopper of a bill about once a month for my TFNa blocker, Remicade, likely thanks to these PBMs. According to Stoller’s newsletter, PBMs and their parent companies account for about 4% of US GDP and 22% of national healthcare expenditures but are finally starting to face some scrutiny on their practices of inflating drug prices and manipulating consumers and marketplaces. I’ve experienced the gut-wrenching, fear-inducing impact of receiving bills for nearly $78k every five weeks.
Remicade Infusion Cost p/5-weeks
Stoller’s article spends time on the crazy-making of insulin prices, but he also touches on Humira, the most popular self-delivered injection for people with IBD and RA,
Take the most expensive drug historically in America by aggregate revenue, Humira, which made over $22 billion for AbbVie in 2022. It recently lost its patent protection, and there are several generics, known as ‘biosimilars,’ coming into the market. Several drug manufacturers (Coherus, Sandoz, Boehringer Ingelheim, etc.) invested in developing biosimilars to launch when the Humira patent expired. These drugs brought the sticker price of the drug down 10x from $80,000 per year to as low as $8,000 per year.But none of these are able to get onto the shelf. Instead, what happened is that CVS started a drug manufacturing company called Cordavis to sell Humira biosimilars to its specialty pharmacy (CVS Specialty). They charge $1,300 per month, compared to some that are less than half that. Since CVS owns a PBM they controlled the formularies - and therefore the drug access - of between a fourth and third of Americans. They directed their PBM to preference their own drug through Cordavis and ignore the other biosimilars available on the market from smaller pharma companies, adding what I’m told is $50-100 million to CVS’s bottom line.
As patients, we are relying on pharmacies to have our best interests (and health!) at heart and often don’t know how to get clearer information on our options let alone price breakdowns. For my own $78k monthly bill, I was fortunate enough to discover that Janssen (a division of J&J) has a service to cut the cost of the Remicade infusions to almost nothing. Unfortunately, it requires a lot of effort and diligence on the part of the patient and most people may not ever even find out about the service.
To top it off, biosimilars are not exactly the saviors that they are made out to be, and can cause more problems than they are trying to solve, thanks, in part, to the FDA providing shortcuts to get them to market. Drug companies of these cheaper replacements only need to show efficacy for one proposed treatment and then get fast-tracked for other treatment categories (one of the reasons why they are cheaper). This can have dramatic results for patients receiving treatment. In 2019, I wrote about my insurance company requiring doctors to change my medication to Inflectra, a biosimilar for Remicade (at a cost savings of ~15%) to disastrous results. After spending about a week after every treatment with a myriad of side effects that included losing vision in one eye and temporary paralysis, I started researching Inflectra. As it turns out, the biosimilar was only tested for rheumatoid arthritis and Ankylosing Spondylitis, but received approval for Crohn's Disease. Canada refused to classify Inflectra for IBD because they could not rule out causing a “mechanism of action” for IBD complications. It was only because of my research and the advocacy of my infusion nurse that I was able to get back on Remicade.
If you are relying on any of these high-cost drugs, keep your eye on the FTC and potential litigation against PBMs and be sure to ask your health care provider, or medication brand about programs to help lower the cost of these drugs for your health, well-being, and quality of life. A great place to start is signing up for Matt’s newsletter at Substack and following Douglas Ferrar of the FTC on Twitter.
The FTC just released an interim report on pharmacy benefit managers, the dominant middlemen who hike the cost of prescriptions, including overcharging patients for cancer drugs. 1/13 https://t.co/l6Az0qIM04
