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As the new Trump administration begins in freezing-cold Washington, we look at the FTC’s new report on PBMs, what to know about Medicare Part D changes, what happened at JPM Week, and much more. (862 words, 4 minutes, 18 seconds) |
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1000% markups: FTC report blasts PBMs |
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Pharmacy benefit managers (PBMs) make billions in profit while driving up the price of prescription drugs with markups exceeding 1,000%, says a new Federal Trade Commission (FTC) report.
The takeaway: The three largest PBMs and affiliated pharmacies earned $7.3 billion in revenue above the National Average Drug Acquisition Cost (NADAC) on specialty generic drugs alone during 2017-2021, according to the FTC’s second report on “the prescription drug middleman industry.”
A focus on specialty drugs: After FTC’s July report highlighted PBMs’ vertical integration with insurers and pharmacies, this report shows how PBMs use market power to profit from hiking prices on specialty generic drugs, which target conditions like cancer, HIV, or rare diseases.
A few more findings: - Drugs are marked up “hundreds and thousands of percent.”
- PBMs steer profitable prescriptions to affiliated pharmacies.
- PBMs bill sponsor clients more than they reimburse pharmacies for drugs.
- Patients’ and plan sponsors’ spending on drugs increased significantly.
- Specialty generic drugs are a major profit driver for the three largest PBMs.
BIO has long called for PBM reform, explaining how PBMs cause patients to lose out on rebates, independent pharmacies to close, and drug prices to rise (among other abuses). Read more in Bio.News. |
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What patients need to know about Medicare Part D changes |
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To help patients navigate important Medicare Part D changes, Bio.News asked the National Health Council (NHC) to explain what’s new.
Out-of-pocket cap: The highest-profile change to Medicare in 2025 is a $2,000 per year limit on beneficiary costs for prescription drugs, including copays and coinsurance.
Smoothing: Patients can spread drug costs out over the year but must enroll in the Medicare Prescription Payment Plan (MPPP).
To help patients understand and navigate these changes, NHC, Medicare Access for Patients Rx (MAPRx), and several other patient advocacy groups launched outreach and education campaigns. “Medicare is rolling out several new benefits in 2025,” explains the NHC. “These new benefits may be confusing to beneficiaries, and coupled with other big changes, may result in Medicare plans looking very different going forward.” NHC is eager to hear how the new changes and enrollment systems are affecting patients or caregivers. To share your experience (good, bad, or indifferent), you can contact MedicarePartD@nhcouncil.org.
More people are eligible for the Low-Income Subsidy Program, which provides reduced Part D costs for patients with limited income. Beneficiaries with an income of up to 150% of the federal poverty level are now eligible.
Do you have questions? NHC and MAPRx have resources, and Bio.News has more insights. |
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BIO’s John Crowley speaks at Avantor Conference |
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BIO President & CEO John F. Crowley was the keynote speaker at the Jan. 13 Avantor America Sales Conference of Avantor Sciences. He reminded Avantor employees how their work helps patients and saves lives, and discussed his own journey from seeking a cure for his children’s rare disease, to running a biotech, to leading BIO. Avantor partners with BIO in the BIO Business Solutions® program. |
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What Else to Read This Week
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BIO issued a statement on the list of 15 new drugs selected for government price setting. “In the final hours of this administration, President Biden is doubling down on a flawed drug pricing scheme that is jeopardizing seniors’ access to important medicines and undermining the development of new cures and treatments,” said BIO. “Patients with cancer, mental health illnesses, rare diseases and other conditions are experiencing longer, healthier lives because of the work of innovator companies. And yet this law is upending an innovation ecosystem that countless people rely on.” Read the whole statement.
M&A got off to a promising start at JPM Week—and multi-billion-dollar agreements portend more dealmaking ahead. In the biggest JPM Week deal announced, Johnson & Johnson agreed to spend approximately $14.6 billion for Intra-Cellular Therapies, whose CAPLYTA® is approved for treating schizophrenia and bipolar depression (and is being considered for approval for another indication). BIO’s partnering platform saw record activity, one of several signs that bode well for the BIO CEO & Investor Conference in February.
NYT: 340B “middleman” harms patients. “Now, more than half of nonprofit hospitals in the United States take part” in the 340B program, the Times reports. “While some providers say it has helped keep their doors open, others—especially large nonprofit health systems—have been accused of maximizing payouts and swallowing the profits.”
Switch Bioworks announced a $2 million grant from the Department of Energy’s Advanced Research Projects Agency-Energy to develop biotech for turning microbes into nitrogen fertilizer producers. The BIO member is working on “enabling nitrogen-fixing microbes to compete and establish themselves on crop plant roots before switching to fertilizer production—an industry-wide challenge that has been limiting biofertilizer cost and performance.” Reducing reliance on synthetic fertilizers will reduce pollution and costs in the production of corn for biofuel.
Coming up: BIO at the Farm Bureau Convention. Sylvia Wulf, BIO’s Interim Head of Agriculture and Environment, will give remarks, “Innovation and Agriculture: Advancements in Biotechnology,” on Saturday at the American Farm Bureau Convention in San Antonio, TX. Wulf will discuss the biotech industry’s contributions to farming with Joby Young, Executive Vice President of the American Farm Bureau. |
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Beltway Report: What's Ahead in Washington
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