PUTT Opinion: The Deadliest Addiction in the U.S. Isn’t What You Think It Is
The deadliest addiction in the U.S. may not be meth, cocaine, heroin or even fentanyl. The deadliest addiction in the U.S. is prescription drug kickback money, with habitual abusers including the largest health insurers; their pharmacy benefit managers (PBMs); and a coterie of benefits brokers and consultants who help themselves not once but twice to money flows paid in good faith for services ostensibly rendered — on both sides of the negotiating table. Money that could be going to lower drug costs, offset premiums, or even to research disease and develop new medications. Instead kickback money abusers are prime catalysts for pharmacy deserts, patient bankruptcy, worsening illnesses, and healthcare small business deaths.
Prescription drug kickback money goes by different names: rebates, incentives, bonuses, commissions, discounts, “price concessions”. Discounts by any name sound good — how can they be bad, especially when PBM executives testify before Congress saying they return their negotiated rebates over to their clients? Yeah right.
Last month Janssen, Johnson & Johnson’s pharmaceutical manufacturing division, released their 2022 Transparency Report. You may remember last year we covered Janssen’s 2021 report, in which the Belgium-based manufacturer disclosed having paid $33.9 billion in “rebates”, with $8.3 billion alone paid to commercial insurers and pharmacy benefit managers while Janssen’s net drug prices decreased. In 2022 Janssen paid an astounding $39 billion in rebates, with $11.2 billion paid to commercial insurers and PBMs.
That’s a 35% increase — almost $3 BILLION more prescription drug kickback dollars in one year paid to middlemen who provided no therapeutic product or service to patients whatsoever while Janssen’s net drug prices decreased a 6th year in a row. Bear in mind Janssen is just one of at least 20 major manufacturers required to “concede” payments (i.e. pay a kickback) to have their products included on patient plan formularies.
Meanwhile, an extensive investigation published in STAT News last week confirmed what we at PUTT began pointing to in 2018 with our EpiPen and Humalog price diagrams: a retinue of charlatans posing as benefits plan “consultants” and “brokers” are charging the nation’s largest employers to locate suitable employee health benefits providers, while at the same time receiving “incentive” or “bonus” money (i.e. bribes) from those same health benefits providers. In the regular world, incentivizing someone to ensure you get the contract is called “bribery” and those engaging in it are considered criminals.
Attorney and industry champion Jonathan Levitt, principal at healthcare law firm Frier Levitt calls the practice of brokers accepting “incentives” (bribes) “beyond unethical” — and it is — but this is U.S. healthcare and by now no one should be surprised to discover a second set of shadowy middlemen whose greed is also feeding into ever increasing drug prices.
Like it or not, rebates, discounts etc. are factored into a drug’s list price (that is, the end price retail price at the pharmacy counter). A manufacturer’s net price can remain flat or even decrease in response to public pressure, but PBM demands for greater rebate revenue combined with “incentive” payments to brokers will only continue to push drug prices higher while decreasing patient access to affordable medication.
And that’s what makes the prescription drug kickback money addiction so deadly to Americans. The unchecked greed on the part of health plans, PBMs and benefits consultants escalating drug prices is unsustainable. Patients required to meet their deductibles — including Medicare beneficiaries in the “donut hole” — pay the list price for medications or fall back on charitable or manufacturer assistance (which often doesn’t count toward their deductibles, thanks again to the unfettered PBM greed). In 2022, Janssen provided support to more than 1.16 million patients who couldn’t otherwise afford their medications. What PBM has provided even a fraction of that kind of assistance to patients in need? Exactly zero.
But we consumers, taxpayers, patients and voters must face up to an inconvenient, ugly truth for ourselves: as long as we remain silent, or disinterested, or complacent about demanding full and unfiltered transparency from our health benefits providers, we’ll remain complicit in keeping a status quo in which we continue to fund an unsustainable system run by junkies.
We must stage an intervention. We must break the cycle of corporate addiction to prescription drug kickback money. Failure to act will inevitably result in deadly consequences for everyone.
PUTT Executive Director