We all know some of the biggest barriers to universal US healthcare are drug manufacturers and private indurance companies, but YSK about a third lesser known entity that is equally a culprit as the first two: Pharmacy Benefit Managers (PBMs)

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In a nutshell, PBMs get commission from all over the medical supply chain. They negotiate prices of drugs for pharmacies in return for commission, and they also receive rebates from drug manufacterurs based on total sales volume. The twist is that PBMs set pharmaceutical prices obscenely high, and when people purchase them, they go to the drug companies and say that people paid too much money for the drugs based on their formulas for calculating that overspenditure, and the manufacturers give them that extra money as a rebate. PBMs then take a cut of that money and give the rest to their employers: insurance companies. PBMs are incentivized to overcharge to get more money from the cut, and insurance companies are happy with getting that extra cash from them so they do nothing to stop PBMs from overcharging.

Source: https://scopeblog.stanford.edu/2019/03/05/understanding-high-drug-costs-and-the-role-of-pharmacy-benefit-managers/

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