Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics #00512

Submission Number:
George Garmer
Initiative Name:
Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics
John D Rockefeller, Trial of the Century People vs. Standard Oil Closing argument statement at Trial of the Century: "The picture painted of Standard Oil is a depressing one. No trust in the history of America has been so destructive in its pursuit of profit. Time and time again we have heard how Standard Oil has used secret kickbacks from the railroads, routinely engaged in predatory pricing, used intimidation and exclusive sales territories to put refineries out of business. For over 30 years Standard Oil has been on a mission to crush its competition and establish itself as a monopoly to hoist up the price of kerosene." PBM and Standard Oil Parallels, Time for a NEW Trial of the Century PBMS and PBMs on behalf of certain insurance companies use secret kickbacks, routinely engage in predatory pricing, use intimidation and use exclusive territories. In addition to all of this, they also collude amongst themselves and the other big players in healthcare as they gobble one another up. They get to see into the inner workings of their competition through claim adjudications that their competition has no choice but to use. PBMs have established a per prescription penalties system on all Medicare D claims they call DIR fees which they are using to drive their competition out of the marketplace. This penalty system is a manipulation of the Medicare D act and is increasing the cost of prescriptions in Medicare D. These entities are able to enter into their competitions' place of business for audits. These audits are in the Trojan horse of Federal regulations to root out Fraud, Waste and Abuse. PBMs muzzle their competition with contracts that prevent the competition from revealing PBMs unfair business practices. These mega companies increasingly have diminishing work conditions for their own employees putting unrealistic quotas in place and have warning systems in place to tell employees they are not working fast enough. The employees in their retail locations often work off the clock to complete "required" tasks. Employees work under the thread of replacement because of the glut of pharmacists in the marketplace because these same companies went to the government to complain about the shortage of pharmacists a decade and a half ago. States invested millions of dollars in these new pharmacy school facilities. We now have more than double the number of pharmacists graduating from pharmacy schools across the country. This abundance of pharmacists is use as one of the intimidation tactics by management creating sweat shop conditions in the workplace. PBMs are able to see their competitions bidding contracts with the government through wholly owned subsidiaries that have data management contracts with the government. Information is leaked to lobbying groups as well as the parent company. What Standard Oil did a century ago affected where the profits of the energy industry went and the health of workers. Today PBMs' business practices, business relationships and the layers they own affect the health outcomes of the American people. These practices are increasing the cost of healthcare. The quality of care of the individual is diminished in the pursuit of increased profit. Their practices affect the distribution of wealth in our country channeling Federal dollars to themselves from small business through unfair contracts not questioned by our government. This is all happening as a direct result of Federal agencies' action and inaction. The PBMs and the multiple layers of insurance and healthcare they own hide behind the "ERISA noninterference" clause. This is far worse than anything John D Rockefeller or Standard Oil ever did. There is now a group of companies that has surpassed Standard Oil's destructiveness in the pursuit of profit, the PBM. Will our government act now or wait until only one or two mega companies have complete control of the nation's drug supply? We are marching toward a single payer system. Will that single payer be the Federal Government or a for profit company giving us all a raw deal?