Basically the drug manufacturer charges the insurer high prices then kicks back some of that to cover your out of pocket costs so you are individually better off but the system is worse off. Most countries solve this by the government negotiating with the drug manufacturer for everyone and refusing to cover it until they get a reasonable price.
That’s the coupon scheme which is a bit different. The discount programs I’m talking about make deals with pharmacy benefits managers which are middlemen between pharmacies and drug companies. Part of the agreement between the pharmacy and PBMs is that the pharmacy must honor discounts with companies like GoodRx even though it means they could be losing money on the sale.
I’d like to learn more about these PBMs and how they have so much power and what their purpose is.
Thanks for the clarification. From this link looks like another middleman that negotiates discounts with drug makers for insurers then marks it up. I'm curious who makes more profit. The PBM or the drug manufacturer.
It's my understanding that the discount cards somehow work with pharmacy benefits managers (which the person I responded to mentioned). How and why they work has never made much sense to me.
Basically the drug manufacturer charges the insurer high prices then kicks back some of that to cover your out of pocket costs so you are individually better off but the system is worse off. Most countries solve this by the government negotiating with the drug manufacturer for everyone and refusing to cover it until they get a reasonable price.
https://kffhealthnews.org/news/article/drug-companies-copay-...
That’s the coupon scheme which is a bit different. The discount programs I’m talking about make deals with pharmacy benefits managers which are middlemen between pharmacies and drug companies. Part of the agreement between the pharmacy and PBMs is that the pharmacy must honor discounts with companies like GoodRx even though it means they could be losing money on the sale.
I’d like to learn more about these PBMs and how they have so much power and what their purpose is.
Thanks for the clarification. From this link looks like another middleman that negotiates discounts with drug makers for insurers then marks it up. I'm curious who makes more profit. The PBM or the drug manufacturer.
https://www.investopedia.com/articles/markets/070215/what-ph...
I asked that when I first heard about them, and I came to the same conclusion the FTC did, basically: https://www.ftc.gov/news-events/news/press-releases/2023/02/...
Their S-1 also stated,
> In addition, HIPAA, which we believe does not currently apply to most of our business as currently operated
(I should also say that I agree with the implicit message in your comment, too.)
No but I understand that Friskies and Lean Cuisine are not the same products despite both being owned by Nestle.
It's my understanding that the discount cards somehow work with pharmacy benefits managers (which the person I responded to mentioned). How and why they work has never made much sense to me.