tag:blogger.com,1999:blog-1752771132348583018.post2719654811303913223..comments2024-03-28T17:24:45.146-05:00Comments on Managerial Econ: Can incentive pay give us better drugs?Luke Froebhttp://www.blogger.com/profile/06832270922187297624noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-1752771132348583018.post-2232121803436839822015-11-28T11:19:19.241-06:002015-11-28T11:19:19.241-06:00Express Scripts may be vocal when criticizing high...Express Scripts may be vocal when criticizing high drug prices, but let’s look at the sheer volume of business when it comes to pharmaceuticals. In fact, zacks.com, a company that reports on earnings of organizations states that “Express Scripts Holding Company posted fourth quarter earnings per share of 1.39…revenues were up 2.1% year over year in the reported quarter to $26.3 BILLION, while profit was up 5.1% to $2.3 BILLION. Earnings per share are expected to continue to rise” (zacks.com, 2015).<br /><br />Drugwatch.com discusses the fact that Big Pharma paid $3.5 BILLION to doctors and hospitals in 2013. “When you look at why drug companies and device companies make gifts and offer consulting payments to physicians, the main goal is to influence prescribing practices…to improve their financial bottom line…not represent the best interest of patients” (Llamas, 2014).<br /><br />PBMs “keep a portion of rebates and discounts they negotiate from pharmaceutical companies”. So, is the PBM actually negotiating the lower prices for themselves, or for consumers? I feel that the bottom line is, there is a big economic value in pharmaceuticals, and by default, PBMs. Not only do they keep the economy running (people need medication, therefore it is relatively inelastic), but people feel dependent on them. And, when it comes to medication that is thought to either save or prolong one’s life, the pharmaceutical company holds the upper hand. <br /><br /><br />Zacks.com. (2015). Express Scripts Beats on Q4 Earnings & Revenues. Retrieved from http://www.zacks.com/stock/news/165483/express-scripts-esrx-beats-on-q4-earnings-amp-revenues<br /><br />Llamas, Michelle. (2014). Big Pharma Paid $3.5 Billion to Doctors, Hospitals in 2013. DrugWatch. Retrieved http://www.drugwatch.com/2014/10/02/big-pharma-pay-doctors-hospitals-billions/<br />Anonymoushttps://www.blogger.com/profile/15928484751638984498noreply@blogger.com