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The healthcare industry is starting to turn on itself as pressure over drug prices heats up

The healthcare industry is starting to turn on itself as pressure over drug prices heats up

As scrutiny of high drug prices in the US intensifies, so has the finger pointing about who is to blame.

This week, that came in the form of an interview in which an executive at Gilead blamed high prices on pharmacy benefit managers, the companies that help insurance plans determine what drugs they’ll cover and how much they’ll pay.

Gilead’s executive vice president of worldwide commercial operations, Jim Meyers, suggested contracts with PBM’s are one reason price of its hepatitis C drug as high as it is. (Which is high: the drug, called Sovaldi, has a list price — not accounting for any discounts or rebates — of $84,000, or $1,000 per pill).

“I have never met, in this entire experience, a PBM or a payer outside of the Medicaid segment that preferred a price of $50,000 over $75,000 and a rebate back to them,” Meyers said in an interview with Bloomberg News. Rebates paid by the drugmakers to the PBMs are meant to be passed along to whomever is paying for the drug, but the PBM is able to keep some, depending on the agreement.

Now, the largest PBM — Express Scripts — has responded, by calling on the company to go ahead and lower its prices.

“Not only would we agree to a lower list price, we’re asking you to offer one,”  Everett Neville, senior vice president of supply chain and specialty at Express Scripts wrote in a letter to Gilead’s CEO. The letter was shared with Business Insider. “We won’t rip up our contract. In fact, we are happy to honor all the terms of our contract and expect you to do so as well. A lower price does not affect that.”

Gilead declined to comment on the letter.

Here’s the full letter, sent to Gilead CEO John Milligan

Originally posted on businessinsider.com

 

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