She talked about big business market power, monopoly, etc. and mentioned that in the sixties ago North Dakota passed a law saying only pharmacists can own pharmacies. Thus they have no chains. All pharmacies are independently owned. This produces a natural experiment with neighboring South Dakota. Lower prescription costs in North Dakota, more pharmacies than other states by big margins, and they beat South Dakota in these and other measures.
For a while I was obsessed with this story and asked pharmacists I know about PBMs and they just rolled their eyes at the rapacity. The PBMs are utterly useless money extractors. They suck up money for no good purpose. Makes me think of David Graeber's book, Bullshit Jobs. PBMs are essentially bullshit corporations. They add no value while sucking up dollars acting as middleman AND retailer simultaneously.
Connecting to my previous question about what exactly big firms are good for, well not necessarily vaccine distribution. Remember this story from last year?
This year my insurance company required me to enroll in SaveonSP for my specialty medication to "reduce my copay to zero." I didn't think anything of it until I got a letter from the drug company's copay assistance program warning me about limiting reimbursements for patients using "maximizer" programs. Note: SaveonSP asked for my copay assistance information when enrolling, presumably to bill them directly. I decided to look into it further because I've been burned by all sides ever since I was prescribed this medication 10 years ago. There wasn't a lot out there but this article seemed to have some good information: https://www.drugchannels.net/2020/05/why-do-cvs-and-express-scripts-rely-on.html
I found this section particularly enlightening, "With SaveonSP, a commercial plan sponsor declares specialty drugs to be 'non-essential health benefits.' Non-essential drugs are still covered by the plan, but they are not subject to the Affordable Care Act (ACA) Essential Health Benefit requirements and can be removed from the out-of-pocket maximums required by the ACA."
Jan 16, 2022·edited Jan 16, 2022Liked by Matt Stoller
Hello Matt,
Please cover the monopolistic issues surrounding YouTube and Rumble. Rumble is currently suing Google for $2 billion for monopolistically referencing YouTube videos over Rumble videos in search results. It would also be great if you could look into the larger related issues of free speech and a free Internet and how alternative social networks like Rumble, GETTR, Substack, and Gab are providing a way for people to overcome the censorious and arbitrary way Big Tech and corporate media are abusing and preferencing certain monopolistic content creators (e.g. MSNBC, CNN) with a certain narrative over increasingly popular independent alternatives. With the Democratic Party continuing to step up its efforts in cracking down on dissent on both the left and the right, how will these alternatives be able to persevere or even survive?
Another tiny point of light was the $750+ million settlement in the St. Louis v. NFL/Rams case. I think STL could have extracted more but its still an order of magnitude higher than other franchise relocation cases. Interestingly enough, STL went for a state breach of contract theory over antitrust.
Thanks for focusing on PBMs. The public needs more details and understanding on this subject. I know very little about them except that they're useless!
Those Hochuls sound absolutely ghoulish. Reminds me of the Clintons and Walmart in Arkansas in the 1980s, gleefully prepping the way to destroy the Robinson-Patman act.
CVS (their Caremark division handles drugs for all retired TX teachers) sent me a letter apologizing for accidentally allowing me to get 90 day supplies of a drug from Walgreens. Offered a map of places, other than Caremark—mail order, where I could get 90 day supplies. None within a hundred miles.
But, I went into Walgreens for a refill, thinking it would be only a 30 day supply. It was 90, same as always.
California government hiring contractors to produce it's own insulin, reminds me of how the US government commissioned Reynolds to produce aluminum. That was after monopolist Andrew Mellon, tried to extort the US government for aluminum needed to build planes in the middle of saving the world from the Nazis. And neolibs think economic power has nothing to do with political freedoms. SMH.
Even some at the University of Chicago are apparently rethinking their positions, or at least giving some voice to alternative positions, as there are people like Tim Wu writing articles that are then put on the Stigler Center's website.
You should be kissing Shkreli's ass. He played the Rx market like GameStop diamond hands. He realized this useful drug was already worth a lot of money, but the market price was low, because no one would even *produce it* for the people who critically needed it, production costs outweighed demand. So he sent up a flare by attracting greedy pharma developers by arbitrarily raising the market value, which magically provided an incentive to produce generics for the drug. And only then was the thing produced and thus consumer-available *at all.* In the whole time Shkreli had the sole patent, he never even had a request to *produce* the drug, not when it was cheap nor when it was expensive. But by diamond-handsing it, he forced it into production by others at an affordable rate. That's why Big Pharma hates him, which is why Big Pharma paid news outlets to make YOU hate him. Don't buy the hype, he's better at the game than Big Pharma is, and a better person to boot, and they hate him for it.
Thanks for writing such a positive story. The insulin and pbm monopolies were a couple of the topics that I wrote about in a previous open thread. Thanks for touching on those subjects!
It's great that so many positive things are happening. The market is too monopolized and the free market has run out of momentum. Linda Khan and many others are pushing the pendulum the other way and this is going to help kickstart the economy so it works for more people not just the oligarchs and is that better overall. The oligarchs don't have the power or the desire to drag everyone else along (raising all boats, trickling down or whatever) but millions of small and medium sized businesses, workers and entrepreneurs will do it for themselves if they are not burdened and blocked out of the market by crony capitalism.
I did not understand how drug discount cards like Good RX work. A representative of the company come into or pharmacy to provide cards to hand out, and I asked him where the makes their money. He said, "the company doesn't *make* money - the company pays money to reduce drug costs for patients."
...
My suspicion is that they selling information that they have access to once that are legitimately involved in drug billing.
I vaguely remember a reference to this system in one of your newsletters, and maybe I just need to find that and re-read it. If you've covered this already, I apologize.
The pharmacy benefit manager story is fascinating. Three years ago, almost exactly, I heard an interview with one Stacy Mitchell (of the Institute for Local Self Reliance). https://podcasts.apple.com/us/podcast/amazons-wish-list-with-stacy-mitchell/id1382983397?i=1000428207886
She talked about big business market power, monopoly, etc. and mentioned that in the sixties ago North Dakota passed a law saying only pharmacists can own pharmacies. Thus they have no chains. All pharmacies are independently owned. This produces a natural experiment with neighboring South Dakota. Lower prescription costs in North Dakota, more pharmacies than other states by big margins, and they beat South Dakota in these and other measures.
For a while I was obsessed with this story and asked pharmacists I know about PBMs and they just rolled their eyes at the rapacity. The PBMs are utterly useless money extractors. They suck up money for no good purpose. Makes me think of David Graeber's book, Bullshit Jobs. PBMs are essentially bullshit corporations. They add no value while sucking up dollars acting as middleman AND retailer simultaneously.
Connecting to my previous question about what exactly big firms are good for, well not necessarily vaccine distribution. Remember this story from last year?
https://www.washingtonpost.com/outlook/small-pharmacies-beat-big-chains-at-delivering-vaccines-dont-look-so-shocked/2021/02/05/6bb307ec-671b-11eb-886d-5264d4ceb46d_story.html
It turns out big chains are not actually more efficient. Yet more empirical evidence against the pro-monopoly ideology.
It really is great to see some good news.
Re: Pharmacy Benefits Managers
This year my insurance company required me to enroll in SaveonSP for my specialty medication to "reduce my copay to zero." I didn't think anything of it until I got a letter from the drug company's copay assistance program warning me about limiting reimbursements for patients using "maximizer" programs. Note: SaveonSP asked for my copay assistance information when enrolling, presumably to bill them directly. I decided to look into it further because I've been burned by all sides ever since I was prescribed this medication 10 years ago. There wasn't a lot out there but this article seemed to have some good information: https://www.drugchannels.net/2020/05/why-do-cvs-and-express-scripts-rely-on.html
I found this section particularly enlightening, "With SaveonSP, a commercial plan sponsor declares specialty drugs to be 'non-essential health benefits.' Non-essential drugs are still covered by the plan, but they are not subject to the Affordable Care Act (ACA) Essential Health Benefit requirements and can be removed from the out-of-pocket maximums required by the ACA."
Hello Matt,
Please cover the monopolistic issues surrounding YouTube and Rumble. Rumble is currently suing Google for $2 billion for monopolistically referencing YouTube videos over Rumble videos in search results. It would also be great if you could look into the larger related issues of free speech and a free Internet and how alternative social networks like Rumble, GETTR, Substack, and Gab are providing a way for people to overcome the censorious and arbitrary way Big Tech and corporate media are abusing and preferencing certain monopolistic content creators (e.g. MSNBC, CNN) with a certain narrative over increasingly popular independent alternatives. With the Democratic Party continuing to step up its efforts in cracking down on dissent on both the left and the right, how will these alternatives be able to persevere or even survive?
Another tiny point of light was the $750+ million settlement in the St. Louis v. NFL/Rams case. I think STL could have extracted more but its still an order of magnitude higher than other franchise relocation cases. Interestingly enough, STL went for a state breach of contract theory over antitrust.
Thanks for focusing on PBMs. The public needs more details and understanding on this subject. I know very little about them except that they're useless!
Those Hochuls sound absolutely ghoulish. Reminds me of the Clintons and Walmart in Arkansas in the 1980s, gleefully prepping the way to destroy the Robinson-Patman act.
CVS (their Caremark division handles drugs for all retired TX teachers) sent me a letter apologizing for accidentally allowing me to get 90 day supplies of a drug from Walgreens. Offered a map of places, other than Caremark—mail order, where I could get 90 day supplies. None within a hundred miles.
But, I went into Walgreens for a refill, thinking it would be only a 30 day supply. It was 90, same as always.
California government hiring contractors to produce it's own insulin, reminds me of how the US government commissioned Reynolds to produce aluminum. That was after monopolist Andrew Mellon, tried to extort the US government for aluminum needed to build planes in the middle of saving the world from the Nazis. And neolibs think economic power has nothing to do with political freedoms. SMH.
The real tragedy of Martin Shkreli is how much of what he did that is legal.
Even some at the University of Chicago are apparently rethinking their positions, or at least giving some voice to alternative positions, as there are people like Tim Wu writing articles that are then put on the Stigler Center's website.
Nice to have a little good news.
You should be kissing Shkreli's ass. He played the Rx market like GameStop diamond hands. He realized this useful drug was already worth a lot of money, but the market price was low, because no one would even *produce it* for the people who critically needed it, production costs outweighed demand. So he sent up a flare by attracting greedy pharma developers by arbitrarily raising the market value, which magically provided an incentive to produce generics for the drug. And only then was the thing produced and thus consumer-available *at all.* In the whole time Shkreli had the sole patent, he never even had a request to *produce* the drug, not when it was cheap nor when it was expensive. But by diamond-handsing it, he forced it into production by others at an affordable rate. That's why Big Pharma hates him, which is why Big Pharma paid news outlets to make YOU hate him. Don't buy the hype, he's better at the game than Big Pharma is, and a better person to boot, and they hate him for it.
https://youtu.be/Jd8E7hWk4Xw?si=r0ilBBaWj_LD7YKx
c.r. Vivek Ramaswamy & Roivant's business model.
Thanks for writing such a positive story. The insulin and pbm monopolies were a couple of the topics that I wrote about in a previous open thread. Thanks for touching on those subjects!
Not even three days after you published this article and already it's aged like milk in the sun.
https://www.reuters.com/technology/microsoft-buy-activision-blizzard-deal-687-billion-2022-01-18/
It's great that so many positive things are happening. The market is too monopolized and the free market has run out of momentum. Linda Khan and many others are pushing the pendulum the other way and this is going to help kickstart the economy so it works for more people not just the oligarchs and is that better overall. The oligarchs don't have the power or the desire to drag everyone else along (raising all boats, trickling down or whatever) but millions of small and medium sized businesses, workers and entrepreneurs will do it for themselves if they are not burdened and blocked out of the market by crony capitalism.
I did not understand how drug discount cards like Good RX work. A representative of the company come into or pharmacy to provide cards to hand out, and I asked him where the makes their money. He said, "the company doesn't *make* money - the company pays money to reduce drug costs for patients."
...
My suspicion is that they selling information that they have access to once that are legitimately involved in drug billing.
I vaguely remember a reference to this system in one of your newsletters, and maybe I just need to find that and re-read it. If you've covered this already, I apologize.