Today, Type 1 diabetes patients pay twice as much for insulin as they did in 2012. This is outrageous — but drug companies aren’t to blame. The problem is a dysfunctional supply chain that benefits everyone except patients.
In today’s system, insurers hire third-party firms, known as pharmacy benefit managers, to manage drug plans. These PBMs negotiate with drugmakers and have the power to decide which drugs are covered by each plan. Each year, manufacturers dole out $150 billion in rebates and discounts as a result of these negotiations. But patients rarely see these savings at the pharmacy counter.