WASHINGTON, D.C. (January 7, 2022) – More than half (50.5%) of every $1 spent on brand medicines went to payers, middlemen, providers and other stakeholders in 2020, according to a new analysis from Berkeley Research Group (BRG). For the first time since BRG began tracking trends in pharmaceutical spending eight years ago, the share of brand medicine spending retained by biopharmaceutical companies has fallen to less than half (49.5%) as rebates, discounts and other payments to the supply chain and other stakeholders steadily increased.
“Despite the deep discounts and rebates paid by our industry to health plans and other middlemen, many patients still struggle to afford their treatments,” said Stephen J. Ubl, president and chief executive officer of PhRMA. “When more than half of what is spent on medicines goes to entities that have nothing to do with making them, the system needs to change. These data reinforce why a holistic approach is needed to address conflicts of interest within the health care system that often lead to higher costs for patients.”
The report, which builds on previous BRG studies, analyzes payments made by patients and their health plans at the pharmacy counter or paid on a claim to a health care provider. Key findings include:
“It’s time that policymakers accurately diagnose the problems that exist across the supply chain and the challenges patients actually experience,” continued Ubl. “We must address what is really driving up costs for patients, like when middlemen are paid based on the list price of a medicine and when insurers refuse to share savings with patients at the pharmacy counter. We also must fix the 340B program, which has enabled hospitals to profit without assurances that patients see any benefit.”
View the full analysis here.
The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier and more productive lives. Since 2000, PhRMA member companies have invested more than $1.1 trillion in the search for new treatments and cures, including $102.3 billion in 2021 alone.