Drug Costs, Drug Shortages and Group Purchasing Organizations continued from page 39 Prior to 1991 GPOs were small, low revenue companies that served hospitals and were not permitted to demand kickbacks from manufacturers. In 1991 GPOs experienced their Big Bang moment and received permission from Congress and Health and Human Services (HHS) to collect kickbacks. Suddenly the revenues of GPOs exploded. Health care costs soared. The Big Three Pharmacy Benefit Managers (PBMs) also write secret contracts for over 80% of all outpatient prescriptions. They were modest sized companies until their Big Bang moment in 2003 when the GPO Safe Harbor was inexplicably extended to PBMs. Now PBMs happily join GPOs in ruling over the healthcare universe, controlling the entry and pricing for the healthcare supply chain for nearly all outpatients prescription drugs. Kickbacks are a percentage of revenue so inflationary incentives prevail. This explains how in 2000 Americans' prescription drug costs were $121B and in 2017 $360B. PBMs enjoy extraordinary profit margins. Thus the rush to either buy one or be bought by one in the marketplace. Merger mania! Generic pharmaceutical companies and medical device manufacturers have not disclosed just how much they must pay to gain access to their customers on the other side of the GPO/ PBM paywall. The cumulative evidence suggests well over $200B in healthcare cost savings by cutting out the middleman kickbacks. This does not include the incalculable financial benefits of restoring freedom to the marketplace for suppliers to compete. If these funds were re-directed from the pockets of businessmen and the campaign coffers of politicians and used instead for healthcare some interesting things would happen. The Association of Community Pharmacists projects outpatient prescription costs would fall by one third if rebates are eliminated. Hospital costs and insurance premiums would fall. Medical device and generic drug manufacturers would experience a renaissance in their businesses. Capital investment for new manufacturing plants in America would result in thousands of high paying American jobs. The middle class does not have to disappear. It is time for kickbacks to disappear and the American middle class to re-appear. Of course all of these financial calculations do not include any calculation of the human toll exacted by the many hundreds of medications in short supply or not available at all. Cardiologists inserting temporary pacemakers because the hospital has no bicarbonate. Bad care. No spinal anesthetics. Bad care. Out of Fentanyl. Bad care. The cost of healthcare is beyond the reach of too many middle class Americans. Repealing the GPO/PBM Safe Harbor for Kickbacks will fix this problem. A bill is already written and Physicians Against Drug Shortages is doing what it can to get it introduced. 40 | www.berkscms.org Mid-term elections are approaching. Politicians will need to make themselves available to their voting constituents. The theme for the mid-term elections should be let doctors and patients join together to save healthcare. Physician-driven and patient-centered Healthcare Town Halls will be coming to many communities. If you wish to host one just let me know. I anticipate 60 in 60 different districts nationwide, but we may have even more. Repealing this Very Unsafe Safe Harbor will be item number one for discussion. There is no path to affordable, high quality healthcare until free-market competition is restored to the drug/medical supply marketplace. This is possible only if Congress repeals the GPO/ PBM Safe Harbor for Kickbacks. Find out if your Congressmen are in favor of unaffordable healthcare kickbacks or opposed. Both Pennsylvania Senators Casey and Toomey are briefed and are in favor of kickbacks. Repeal could be "disruptive" to the market. That is the goal, Senators. Pennsylvanians deserve better. Replace the broken marketplace with a new competitive market that works and lowers costs for patients. What a perfect issue for physicians to assert leadership! Physicians Against Drug Shortages * There have been drug shortages since 2006 * There is skyrocketing inflation for all medications * Americans are paying more money for less healthcare * Something is happening here! * What it is isn't exactly clear, unless.... You are a member of Physicians Against Drug Shortages Join now. www.PhysiciansAgainstDrugShortages.com No dues, just clarity and awarenesshttp://www.PhysiciansAgainstDrugShortages.com http://www.berkscms.org