Insurers to CMS, Congress: We Want More Rx Rebates So Give Us Total Control Over Medicare Drug Benefit

  • by: Robert Goldberg |
  • 11/02/2016
A recent article in MedPage - Insurers to CMS, Congress: For Lower Rx Costs, Hand Us the Reins – needs a bit of translation to help people under stand what handing insurers the rein over what drugs and how much to spend really means.   For instance, the headline should actually read "Insurers to CMS, Congress: We Want More Rx Rebates So Give Us Total Control Over Medicare Drug Benefit" 

According to Medpage: “Congress and the administration can help rein in rising drug costs through a few key regulatory and legal fixes, said insurers and pharmacists at AHIP's National Conference on Medicare, Medicaid and Duals on Tuesday.”

"I think plans need to be given a little bit more leeway to truly assess the value of drugs to make a decision: does this drug at the cost really provide any additional value?" said Sarah Marche, PharmD, vice president of pharmacy services at Highmark, a Blue Cross affiliate in Pennsylvania.

Translation:  We already limit access to life saving medicines for the most chronically and seriously ill seniors based on our current value assessment.   But we want even more control over what patients get.   And by ‘additional value’ we mean increasing the 35-40 percent price discounts we get and what consumers are charged.  We want more. 

Marche noted that not every drug Medicare covers adds value.
"Glumetza [a branded version of metformin] provides no value above and beyond what's available, and if you look at a lot of the commercial formularies, it's blocked," she said. "Nobody's dying. Nobody has any huge issues with that, but we don't have that same flexibility within the Medicare space. So, you're covering a drug that really provides no additional value, just increasing the cost."

Translation:  After Valeant got hammered for hiking Glumetza by more than 800% in 2015, the list price of  stood at $10,020 for 90 tablets, up from $896 in January 2013,.  For the longest time, insurers didn’t complain  .  Half of Glumetza’s price is  given back in discounts, rebates, chargebacks, and the like to wholesalers, managed care organizations, pharmacy benefit managers, federal and state healthcare programs, and others. 

 Under pressure to reduce prices, Valeant gave Walgreens’s an exclusive deal to sell Glumetza as generic prices.  So Express Scripts, the company running our drug benefit decided it could turned around an blocked Glumetza and cutting a deal with a company making a generic version of the drug to make up for the lost rebate revenue.  So we would have covered it if had provided additional profit… I mean value to us regardless of cost.  It really depends on the rebates Express Scripts can share with us.  

Another panelist, Mark Owen, MBA, president of government programs for the the Blue Cross-affiliated Health Care Service Corp., power “to limit beneficiary access to specialty pharmacies.” 

While Owen noted that critics of the idea have said such a change could pose access challenges, he argued that allowing plans to direct beneficiaries towards only certain pharmacies could lower costs and increase adherence.

Translation:   Limiting access allows us to pocket more money because it  ensures  patients have no choice but to take the drugs that we give them.  That way we make the biggest profit margin whether they like it or not.  And we know that charging patients about 40 percent of the retail price of products is a good way to force them to use drugs what give us the biggest margin.   We will work really hard to increase adherence, but only with drugs that fatten our bottom line regardless of whether the drug works for that patient or not.



Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

Blog Roll

Alliance for Patient Access Alternative Health Practice
Better Health
Biotech Blog
CA Medicine man
Cafe Pharma
Campaign for Modern Medicines
Carlat Psychiatry Blog
Clinical Psychology and Psychiatry: A Closer Look
Conservative's Forum
Club For Growth
Diabetes Mine
Disruptive Women
Doctors For Patient Care
Dr. Gov
Drug Channels
DTC Perspectives
Envisioning 2.0
FDA Law Blog
Fierce Pharma
Fresh Air Fund
Furious Seasons
Gel Health News
Hands Off My Health
Health Business Blog
Health Care BS
Health Care for All
Healthy Skepticism
Hooked: Ethics, Medicine, and Pharma
Hugh Hewitt
In the Pipeline
In Vivo
Internet Drug News
Jaz'd Healthcare
Jaz'd Pharmaceutical Industry
Jim Edwards' NRx
Kaus Files
Laffer Health Care Report
Little Green Footballs
Med Buzz
Media Research Center
More than Medicine
National Review
Neuroethics & Law
Nurses For Reform
Nurses For Reform Blog
Opinion Journal
Orange Book
Peter Rost
Pharm Aid
Pharma Blog Review
Pharma Blogsphere
Pharma Marketing Blog
Pharmacology Corner
Pharmaceutical Business Review
Piper Report
Prescription for a Cure
Public Plan Facts
Real Clear Politics
Shark Report
Shearlings Got Plowed
Taking Back America
Terra Sigillata
The Cycle
The Catalyst
The Lonely Conservative
Town Hall
Washington Monthly
World of DTC Marketing
WSJ Health Blog