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Big Pharma, limited competition continue to drive prescription prices higher for patients

Washington, D.C., March 1, 2022 – Today, the Coalition for Affordable Prescription Drugs released a new report from Matrix Global Advisors (MGA), “Understanding Drug Rebates and Their Role in Promoting Competition.” The report highlights how rebates from drug manufacturers to health insurance companies, negotiated by pharmacy benefit managers (PBMs), promote competition and lower insurance premiums. The report offers clear evidence refuting drug companies’ claims that the rebates PBMs negotiate are to blame for increasing list prices for brand drugs and shows that price trends in rebated and non-rebated drugs were comparable over the last four years.

Key findings of the report include:

  • The median list price change from 2018 to 2021 was roughly the same for a sample of rebated and non-rebated drugs.
  • There is a lack of evidence that drug rebates are the culprit behind high drug prices.
  • Policymakers can most effectively lower drug prices by encouraging robust competition among drug manufacturers and promoting common-sense tools that incentivize effective, quality health care.

“This report throws cold water on the notion that rebates drive drug prices higher,” said Alex Brill, MGA’s founder and CEO. “If policymakers are looking for a way to lower drug prices, they should promote brand drug competition and facilitate affordable alternatives like generics and biosimilars coming to market.”

“This report should be a wake-up call for policymakers: Big Pharma’s tall tales about where high drug prices come from have no basis in reality,” said CAPD Spokeswoman Maura Keefe. “Drug companies have hiked prices on more than 800 drugs already this year. If Congress wants to reduce drug prices for American consumers, it must address the problem at its root: the high and rising prices set by drug companies.”

This report comes on the heels of polling released by CAPD that showed a large majority of Americans clearly know that big drug companies bear responsibility for high drug prices and want Congress and the Administration to take immediate action to protect patients. The polling found that 65% of Americans believe pharmaceutical companies are “most responsible” for causing the high cost of prescription drugs.

Read the full report here.

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The Coalition for Affordable Prescription Drugs (CAPD) represents a diverse group of public and private employers, retirees, unions, and the pharmacy benefit managers (PBMs) they partner with to provide affordable, sustainable prescription drug coverage to their employees and members.

Matrix Global Advisors (MGA) is an economic consulting firm in Washington, DC, specializing in healthcare, tax, and fiscal policy. Drawing on years of policy experience, the MGA team uses analytics to help identify, quantify, and solve economic policy problems. Through the use of analytical tools and knowledge of the political and legislative process, MGA helps clients navigate legislative and regulatory proposals, craft policy reforms, and measure their own businesses’ economic footprints.

Media Contact:

Tori Canada

(812) 219-1270