How PBMs profit

Several new studies highlight the growing problem of PBMs—plus, Bio.News has an exclusive look at the growing “biotech sisterhood” and how women CEOs are helping women colleagues and patients. (550 words, 2 minutes, 45 seconds)

PBMs turn fees and pharmacy ownership into profit

A growing share of the profits of pharmacy benefit managers (PBMs) comes from fees and specialty pharmacy ownership—and people aren’t happy, find several recent reports.

What are PBMs, anyway? PBMs choose which drugs receive insurance coverage, charging drug makers rebates and fees for covering them. PBMs profit from keeping drug prices high—and they’re often integrated with pharmacy chains and insurers, with three PBMs controlling 80% of the market.

Profits from fees: While rebate income rose 64% from 2018-2022, PBMs increase profits from fees charged to drug manufacturers by hiking existing fees and creating new ones, says a report published last week by Nephron, a healthcare equity researcher.

Fees are less transparent than rebates,says another recent report from Brookings. They’re often linked to list prices, which Nephron finds can create a barrier to reducing prices.

PBM profits from specialty pharmacies are growing, continues Nephron. Specialty pharmacies provide medications for rare or complex conditions, but PBMs squeeze them out.

Dissatisfaction with PBMs is growing, hitting a nine-year low, finds a survey of benefits managers, PBMs’ primary customers.  

It’s time for PBM reform—and the Federal Trade Commission (FTC), Members of Congress, and BIO agree. BIO will continue to push for reform, including proposed transparency legislation to hold PBMs accountable for unfair practices.

More Health News: 

Drug Channels: The 340B program reached $54 billion in 2022—up 22% vs. 2021
“For 2022, discounted purchases under the 340B program reached a record $53.7 billion—an astonishing $9.8 billion (+22.3%) higher than its 2021 counterpart. The difference between list prices and discounted 340B purchases also grew, to $52.3 billion (+$2.6 billion).”

How the ‘biotech sisterhood’ is bringing change

A growing group of women biotech CEOs are standing up for women colleagues and patients—read our exclusive profile in Bio.News.

How they got here: A proposed “girls’ weekend” saw a surprisingly robust response from more than two dozen women biotech CEOs, launching a “movement,” say sisterhood co-founders Angie You, CEO of Architect Therapeutics; Julia Owens, CEO of Ananke Therapeutics; and Sheila Gujrathi, Chair, Ventyx, ADARx, and ImmPACT Bio.

“There’s a growing number of female CEOs,” said Owens, a BIO Board member. “We should be supporting one another and tapping into each other as a resource much more systematically. We all feel so isolated—and we shouldn’t.”

Why it matters: The need for solidarity, support, and instant understanding of common challenges was obvious at the first meeting, says Gujrathi. “We don’t have to explain the unconscious bias we constantly deal with,” adds You.

For women in the industry: The biotech sisterhood recommends their members for board positions and promotions—and pushes back when they encounter bias, they explain.

For women patients: Issues including the Dobbs decision and breast cancer care have drawn action from the sisterhood, which collaborated with BIO to organize a “fly-in” for women CEOs to meet Members of Congress.

What’s next: With regional events from Boston to San Francisco and an active Slack channel, the sisterhood is expanding and looking forward to welcoming the next generation of women CEOs.

Read the full story in Bio.News.

President Biden’s Tuesday: Joining the United Auto Workers picket line in Michigan before flying to California for a campaign fundraiser.

What’s Happening on Capitol Hill: Capitol Hill is focused on funding the government. Senate Republicans and Democrats are nearing a short-term spending deal, but this could prove challenging in the House, reports Bloomberg.