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Examining the Price of Prescription Drugs

Proposed merger of two Pharmacy Benefit Managers raises issues.

Prescription drugs are expensive. Without insurance, consumers would pay even more for medicines that are essential to their health, wellness, and the welfare of their families. While most consumers are familiar with the role that pharmacies and drug companies play in delivering these drugs, many people overlook the role of Pharmacy Benefit Managers (PBMs). By one estimate, 90% of individuals with prescription drug coverage receive benefits through a PBM, and PBMs handle approximately two-thirds of all prescriptions written in the United States.

PBMs serve as middlemen between drug manufacturers, pharmacies, health plan sponsors, and consumers. PBMs do everything from negotiating the prices health plan sponsors pay for drugs to setting the prices pharmacies are reimbursed for dispensing drugs. They also decide which specific drugs are eligible for reimbursement. 

Some examples of PBMs are Express Scripts, Medco and CVS Caremark. Express Scripts and Medco, two of the nation’s largest PBMs, are seeking to merge and form the nation’s largest PBM. If this merger goes forward, the combined company will administer 1.14 billion prescriptions annually, and would handle 41% of all prescriptions administered by PBMs. The merged PBM would be nearly two times larger than its nearest competitor.

Express Scripts and Medco argue that this merger will benefit health plan sponsors, and ultimately consumers. They claim that the combined company’s scale will give it substantial buying power to drive down drug prices. 

Some consumer advocates and competition experts fear this merger will diminish competition and cause drug prices to increase even more. They question whether the projected savings that the PBMs claim will be passed along to health plan sponsors and ultimately consumers. Community pharmacists - in small pharmacies and large chain drug stores alike - raise important concerns about whether they will be able to compete after the merger and continue to provide in-person services and consultations that many people have come to rely on. 

As Chairman of the Senate Judiciary Antitrust Subcommittee, I convened a hearing Tuesday, to examine the effects of this merger on individuals and prescription drug prices. We heard from many witnesses, including two that represent Wisconsin businesses, and gained much insight into this proposed merger.

I will continue working to make sure the potential merger will not hurt consumers so that you are able to receive prescription drugs at a reasonable price ensuring that you and your family are able to afford the care you deserve.

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Say What? December 12, 2011 at 02:54 AM
Is there a particular party that is for or against euthanasia or infanticide or abortion? Can I vote for someone that would allow this so we can cut down on our costs?
David Tatarowicz December 12, 2011 at 05:44 PM
@ Say What Indirectly the Republican Party supports death over health care ---- right here in Wisconsin, Walker is cutting back by millions health care for those in poverty without children -- just think about it -- he gets a double bang for the buck that is not spent --- the person who cannot get adequate health care will have a shorter life expectancy, and not only will Walker say spending money on that person's health care --- there will no longer be other expenses, such as Food Stamps, as dead people don't eat !
Bob McBride December 12, 2011 at 05:54 PM
But you have to admit, David, that when it come to efficiency, the party that's backed by and always supports Planned Parenthood does a much better job of eliminating those potential unwanted drains on society - before they can even become such.
David Tatarowicz December 12, 2011 at 06:07 PM
@Bob You are absolutely correct --- Sanger who founded Planned Parenthood was a racist and her main intent was to stem the flow of Black babies !! There is also something to be said of the rights of a woman, and many who support PP have no idea why it was started. At one time I thought this was an issue upon which politics could and should play a part --- but the idealogues on both sides will never let that happen. It is the conventional wisdom that all Dems are pro abortion, and all Reps are anti abortion --- but I have found that even among the politicians of each party, that does not hold true. Unfortunately the Red Meat Eaters of both parties keep those with an open mind close mouthed !
Shannon December 13, 2011 at 02:15 AM
And if the now deceased person was employed, he also just created a job! So, it's all good.

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