Focusing on business issues in health care. Written by David E. Williams of MedPharma Partners

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Locking out lock-in pricing

Posted on July 22, 2008

In Medicare Moves To Limit Costs In Drug Plans the Wall Street Journal discusses lock-in pricing, whereby Medicare agrees to pay pharmaceutical benefit managers (PBMs) a fixed priced for a given drug, but the PBM can keep the difference if they negotiate a lower price from the manufacturer. The Journal has adopted an uncharacteristically populist tone for this piece. (See my emphasis below for the heartstring tuggers.)Medicare is trying to curb an opaque industry practice that inflates what some older and disabled people pay for medicines under the federal insurance program s prescript...

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