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High drug prices: Who's really to blame?

Rheumatologist Dr. Robert Levin contends that while others get the benefit of these discounts, consumers pay their copay off of the list price, not the net price realized after the rebates.

"It limits access to care, it hurts our practices," said Levin, who practices in the Tampa Bay area and is president of Alliance for Transparent and Affordable Prescriptions. "There's also front-end discounts offered and fees. The fees are the money that the PBMs keep."

While rebates are about 5-8 percent off the list price, that's not the whole story, according to Levin. The total discount off the list is about 35-50 percent of the price of the drug, Levin added.

"Yes, they'll pass that 5 percent to the health plan," he said, "but the majority is kept by the PBMs. They classify most of this money as fees."

The system has manufacturers over a barrel, Levin said. The manufacturers are compelled to pay these rebates so they can maintain their position on formularies. If not, the patients will have zero access to their drugs. To cover their cost, manufactures increase their list price.

"The PBMs have actually created a system that has driven up list prices," Levin said. "It's all confidential, it's all gagged. Transparency is the key."

Levin called the rebates "disgusting" and "absolutely extortion," but said there's plenty of blame to go around.

"I want to make it clear, I don't think manufacturers should be left off the hook."

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Barbara Arnago