Biotech Values

[rph_in_wi]

Re: Wow!

Dew,

I have to admit that I really didn't think that the PBM would answer. I understand that those rebate contracts are, in most circumstances, considered privileged. I was also not surprised that the sponsor took the rebate money. The really surprising part of this agreement is who looses from it. This is where the NY Times, as usual, gets it wrong.

Let's look at who benefits from this deal.
1)The PBM makes more money than they give back to the sponsor.
2)The sponsor gets a rebate for more than the cost savings from the generic, so they feel they win.
3) The patient probably will get a discounted copay for the brand. Most often the copay is the same as for the generic version.

Who looses? The pharmacy supplying the drug must now spend more money on stocking more of the more expensive drug. Since not all insurers will be requiring brand, the pharmacy must also stock more of the generic. Once the 6 month exclusivity is over, the pharmacy will be stuck with some brand inventory that will never be used, causing more loss. It doesn't take many of these types of arrangements for your bottom line to completely erode.

But that is the pharmacy biz. Now you know why I never owned one!

RPh