pts are starting to wonder about “preferred meds” by their insurance


Some are wondering why their PBM/Insurance is creating “preferred medications” for pts with specific health issues.  The only answer is the MIDDLEMEN in the medication distribution system.

“EPIGATE” is a fictional term to describe the rapid price increase on EPIPEN (auto injector) used for asthma attacks and acute/severe allergy reactions ( anaphylactic shock ).

the graphic above explains where the pt’s money goes that they pay at the pharmacy counter. In this example $608.00

Out of that $608 dollars:

the pharmacy gets $30 – gross profit of abt 5%

the wholesaler gets $20 – gross profit of abt 3%

The pharma gets $274 – gross revenue of abt 45%

the Insurance/PBM  gets $259 – gross profit of 43%

the broker gets $25 – gross revenue of abt 4%

I am not really sure who the “broker” is but there is a middleman that negotiates rebates/kickbacks/discounts from pharmas for the insurance/PBM companies.

The transaction goes like this… the pharmacy collects $608 from the pt… the pharmacy pays the wholesaler $578 for the Epipen. The wholesaler pays the pharma $558 to the pharma. The pharma pays the broker/insurance/PBM $284

46% of the dollars the pt pays at the pharmacy counter… goes to three middlemen who actually does not even provide a product… just a electronic service of shuffling a claim.

The large percent of the money that the broker/insurance/PBM gets from the money that the pt hands over at the register is largely obtained via coercion..  Those middlemen tell the pharma that if they want their particular medication on their approved formulary the pharma will provide a discount/rebate/kickback (commonly referred to as “the spread”) of a certain percent – often as high as 50% of the wholesale price back to them…  OR… in order for the PBM to pay for their product.. it will only be via a PRIOR AUTHORIZATION PROCESS…. which everyone knows that a prescriber will take the less timely route and prescribe the med that is already on their formulary for a particular health issue.

IMO, we are seeing many PBM’s making buprenorphine type products as their preferred med for chronic pain… that is because they can make a lot more money – via the spread – than having a generic opiate being prescribed.

Secondly, there are some rumors that those law firms that are now suing the pharmas , pharmacy wholesalers and chain pharmacy … will at some time in the future turn their focus on the insurance/PBM industry to sue because they have facilitate the opiate crisis by paying for all those opiates that have been prescribed.

It will probably be several years before that happens and the PBM/insurance industry wants to be in the position of defending themselves by point out that they have move more and more chronic pain pts over to buprenorphine products.

When all is said a done… buprenorphine is still a controlled substance (C-III) with a potential for substance abuse/addiction and diversion.  There has been a small number of clinics treating SUD and chronic pain pts with this medication that have been raided by the DEA and some pts have been selling their buprenorphine on the street to get money to buy their drug of choice to abuse.

You can put “wings” on a pig… and it still will not be able to fly.

4 Responses

  1. Thank you so much Steve. Congratulations on your 2 million views!

  2. Never, NEVER trusted Vanila from the day I first heard her speak at HHS.

  3. All the facets of “health care” continue to hold sick people hostage for money.

    • All the facets of “health care” continue to hold sick people hostage for money BEYOND and honest days wages.

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