“We’re very much eliminating the middlemen,” said Trump during his Rose Garden remarks that day. “The middlemen became very, very rich, Right? (Applause.) Whoever those middlemen were — and a lot of people never even figured it out — they’re rich. They won’t be so rich anymore.”

While the President mentioned a list of those who might qualify for this epithet — “drug makers, insurance companies, distributors, pharmacy benefit managers” — it was the last of these that got the most attention.

At issue, says the Trump Administration in its 44-page blueprint for lowering drug prices, “American Patients First,” isn’t quite that the PBMs are getting rich. (In point of fact, Trump tends to like that quality.) Rather, the “hidden negotiation and wealth transfer between drug manufacturers and PBMs,” which is now leading to “a direct increase on consumer out-of-pocket spending that likely decreases drug adherence and health outcomes.”

FDA Commissioner Scott Gottlieb was even blunter in a speech the week before the president — suggesting that these hidden negotiations might even be “kickbacks”:

“To take one example, one of the dynamics I’ve talked about before that’s driving higher and higher list prices, is the system of rebates between payers and manufacturers. And so what if we took on this system directly, by having the federal government reexamine the current safe harbor for drug rebates under the Anti-Kickback Statute? Such a step could help restore some semblance of reality to the relationship between list and negotiated prices, and thereby boost affordability and competition.”

Read full article