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Sunday, October 29, 2023

Who earns more money from generic drug sales: PBMs or drug manufacturers?

 If you guessed manufacturers, you would be incorrect. At least that is according to a new study by Mattingly et al. (2023) in JAMA Health Forum. Using a sample of the 45 generic drugs with >$100m in Part D and used by >1m beneficiaries, the authors found that:

…Medicare Part D spent $11.8 billion for 690 million claims (mean, $22.50 per claim; 95% CI, $18.28-$26.72 per claim), representing 5.5% of all Part D spending ($216 billion) in 2021. The $22.50 was distributed as follows: $9.18 (40.8%) represents PBM gross profit; $3.87 (17.2%), pharmacy gross profit; $2.71 (12.0%), wholesaler gross profit; and $6.73 (29.9%), manufacturer revenue. Total intermediary gross profit (PBM, wholesaler, and pharmacy) ranged from −12.3% to 88.6% of Medicare Part D spending.

The full paper is here.

https://www.healthcare-economist.com/2023/10/26/who-earns-more-money-from-generic-drug-sales-pbms-or-drug-manufacturers/

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