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Articles

CVS Caremark, Express Scripts, OptumRx made more than $7.3 billion in revenue, with markups as high as thousands of percent. 

FTC Report Finds Big Three PBM Mark Ups for Specialty Generics Generated Billions

The presidential action follows up on a 2019 final rule aimed at empowering patients and boosting competition among hospitals, group health plans, and health insurance issuers in both individual and group markets.

Trump Signs Healthcare Price Transparency Executive Order

Trump raises the import tax to 25% on the former—while restoring the latter to 25%—in a move that could potentially take effect on March 4. 

United States Elevates Tariffs on Steel and Aluminum

Finding the optimal balance in pharmacy benefit manager reform.


Rebates or Patients?

A look at the actionable steps needed to elicit change.


Popping the Gross-to-Net Bubble, Part II: What Manufacturers Can Do About It

These medications are used to treat a multitude of conditions including type 2 diabetes, cancer and asthma.

Headlined by Ozempic, Medicare Reveals Second Round of Drugs Selected for Price Negotiations

Unfinished Healthcare Reform

Charitable donations have long been a vital lifeline for patients struggling to afford life-saving medications, particularly those with chronic and rare diseases. Over the past few decades, various assistance programs—including nonprofit safety nets, third-party organizations, and manufacturer-sponsored free drug initiatives—have emerged to bridge the gap between medical advancements and patient affordability. However, despite these efforts, high out-of-pocket costs still prevent many individuals from accessing essential treatments. In an interview with 

, Jonathan James, CEO of Hope Charities, shares insights on reducing barriers to care and improving patient access.

PC: Are there emerging models of charitable giving or patient assistance that you believe could redefine financial access to care in the coming years?

Redefining access to care is a significant task—one that thousands of people have worked on in the United States for a long time. I believe there are numerous hurdles that need to be addressed. We've evaluated various policy changes that could meaningfully improve accessibility for people with these needs. However, achieving a laser-focused agreement remains challenging.

One piece of legislation that has brought significant change in recent years is the Inflation Reduction Act, which limited out-of-pocket expenses for people on Medicare. If you look at what we call the "Medicaid unwinding" that occurred after COVID—where people were once again required to continually prove eligibility—many individuals lost Medicaid coverage and were left in a vulnerable position. Today, millions of people in this country remain completely uninsured. Addressing these challenges requires overcoming several systemic barriers. The Affordable Care Act (ACA) was a game-changer in many ways, expanding access to commercial insurance, which was a positive development.

On the flip side, many people still don’t know how to navigate the system. They remain hesitant or uncertain, as the healthcare landscape has gone through multiple changes over time. In many states, we’ve seen that when people seek coverage through the marketplace, they initially had three to five plan options—some more competitive than when the ACA first launched. However, in certain ZIP codes, choices have since dwindled to just one plan, and that option is often expensive. Fortunately, subsidies have helped bridge some of the financial gap, but much more work is needed to ensure health insurance remains sustainable and accessible.

According to statistics from the Kaiser Family Foundation, while there is significant focus on high-cost medications, they actually account for only about 13% of total healthcare expenditures in the United States. The real financial burden lies in hospitalization and inpatient care, which make up over 50% of costs. As a result, while high-cost medications receive intense scrutiny, they represent a relatively small portion of overall spending. Meanwhile, hospitalization expenses require greater attention and cost-reduction efforts.

The system is complex in many ways, but if we can ensure people receive the care they need at home—such as timely access to the right prescriptions—the reliance on costly hospital visits would decrease. It's crucial that we continue providing robust financial assistance for individuals in critical care situations who require ongoing access to medications. Doing so will help prevent hospitalization costs from escalating even further.

 Charitable donations have played a crucial role in helping patients access life-saving medications, particularly those with chronic and rare diseases who face significant financial barriers. Over the past 25-30 years, various assistance programs—including nonprofit safety nets, third-party organizations, and manufacturer-sponsored free drug programs—have emerged to support patients struggling with the rising costs of healthcare. However, despite these efforts, many individuals still face challenges in affording their treatments, with high out-of-pocket costs often preventing them from receiving necessary care.

For conditions like hemophilia, where annual treatment costs can exceed $1 million, losing access to medication can mean a drastic decline in quality of life, forcing patients to rely on disability or face severe health complications. While charitable programs provide critical relief, they also struggle with sustainability due to funding shortages and limited public awareness. Many organizations must balance the need to educate patients about available assistance while ensuring they have enough resources to support those in need.

Healthcare policies such as the Inflation Reduction Act and Medicaid redeterminations have also influenced access to care, sometimes alleviating costs for certain populations while creating new challenges for others. While high-cost medications often receive the most scrutiny, hospitalization and inpatient care account for a much larger portion of healthcare spending. Expanding financial assistance for prescription medications could help reduce hospital admissions and lower overall healthcare costs.

Looking forward, there is a need for more sustainable models of charitable giving and financial aid to ensure that patients can consistently access the treatments they need. Policy reforms, expanded subsidies, and a greater focus on preventative care may help create a more equitable healthcare system while reducing the financial strain on both patients and assistance programs.

Jonathan James, CEO, Hope Charities, discusses how, despite policy advancements, millions of people still face barriers to healthcare access.

Latest Conference Coverage

PAP 2025: The Unfinished Work of Healthcare Reform

Hope Charities 

Charitable donations have long been a vital lifeline for patients struggling to afford life-saving medications, particularly those with chronic and rare diseases. Over the past few decades, various assistance programs—including nonprofit safety nets, third-party organizations, and manufacturer-sponsored free drug initiatives—have emerged to bridge the gap between medical advancements and patient affordability. However, despite these efforts, high out-of-pocket costs still prevent many individuals from accessing essential treatments. In an interview with 

PC: Tomorrow, you will be a part of the “Retrospective on the Impact of Charitable Donations” panel. Can you provide a brief synopsis of what the session will entail?

I’m really excited about it because it explores how we arrived at the system we have today. There are significant reimbursement challenges and barriers to care, particularly for medications that people rely on—not only for quality of life but also for life-threatening conditions that can cause permanent disability.

PC: Based on your retrospective analysis, how have charitable donations evolved in their effectiveness at reducing financial barriers to care?

Programs designed to help patients—whether through third parties, internal organizations, or various support systems and safety net programs—have been essential in maintaining access to life-saving medications. Over the past 25 to 30 years, the system has evolved in response to rising healthcare costs, which have created significant hurdles. There is a constant tension between having FDA-approved medications available and patients being unable to afford them due to high out-of-pocket costs.

We often say that the most vulnerable patients are already living with severe, disabling, and critical medical conditions. When a medication exists but remains financially inaccessible, these individuals are put in an even worse position due to financial vulnerability.

It is crucial that we address these barriers. The system that exists today has emerged from the efforts of nonprofit organizations and third parties striving to alleviate the burden on individuals. Given the current structure, programs like free drug initiatives from manufacturers and third-party patient assistance programs play an essential role in ensuring that patients receive the medications they need when they need them.

Charitable donations have played a crucial role in helping patients access life-saving medications, particularly those with chronic and rare diseases who face significant financial barriers. Over the past 25-30 years, various assistance programs—including nonprofit safety nets, third-party organizations, and manufacturer-sponsored free drug programs—have emerged to support patients struggling with the rising costs of healthcare. However, despite these efforts, many individuals still face challenges in affording their treatments, with high out-of-pocket costs often preventing them from receiving necessary care.

Jonathan James, CEO, Hope Charities, discusses reimbursement challenges and barriers to care in patients requiring life-saving medications. 

PAP 2025: How Charitable Programs Are Evolving to Improve Patient Access to Life-Saving Medications

Legal Implications of Tariffs on Pharma Supply and Prescription Drugs

PC: What are the legal implications of the latest tariffs—including the "reciprocal" variety—and what challenges do they present to the pharma supply chain?

Reciprocal tariffs could create significant disruptions in the supply chain and many commercial contracts. I don’t want to get overly technical, but many contracts include clauses that activate certain procedures or nullify agreements when events beyond a party’s control occur—such as embargoes or excessive tariffs. These clauses will become increasingly relevant as they may need to address the impact of excessive tariffs. Supply chain disruptions could arise at any moment, particularly with raw materials, which are frequently sourced from overseas.

Some people may have different opinions, but in my view, these tariffs will negatively affect the supply chain and, ultimately, our economy at every level. Prescription drug costs will likely rise significantly as a result.

Unfortunately, Congress has granted broad authority to the executive branch through legislation. Specific laws that come to mind include the Trade Expansion Act of 1962 and the International Emergency Economic Powers Act of 1977. These laws delegate power to the president to adjust tariffs in response to specific circumstances, such as national security concerns or trade negotiations, without requiring new congressional approval. Because of this, the president holds significant control over tariffs, and unless Congress enacts new legislation to curtail this power, the courts have limited options to intervene.

At this point, I’m not entirely sure how the power dynamic will unfold. It used to be that Congress and the president shared these responsibilities, but now, we have to wait and see. Tariffs could be an experiment. That seemed to be the case during this administration’s previous term—some tariffs led to negative consequences, while others remained in place.

The future of NIH-funded research is facing significant uncertainty due to changes in funding policies under the new administration. A major issue is the reduction of indirect cost reimbursements, which cover administrative, regulatory, and overhead expenses, from 50% to 15%. This shift, currently halted by legal challenges, threatens research institutions’ financial stability. Additionally, a freeze on grant proposal reviews via the Federal Register has further complicated NIH’s funding process, requiring researchers to seek alternative funding sources, primarily from the private sector. However, this shift could create a highly competitive environment, potentially stalling critical research in areas like cancer and sickle cell disease.

Political challenges, including diversity-related restrictions, further complicate clinical trials. Researchers may now need to approach trial design with a more conservative lens, which could hinder studies focused on minority populations and vaccine development. If funding and regulatory barriers persist, the U.S. risks losing scientific talent to more research-friendly environments in the EU and Asia.

While some court rulings have temporarily allowed NIH to continue research funding, long-term solutions would require Congressional action. However, given the current partisan landscape, legislative intervention to secure NIH funding against political interference appears unlikely. If the administration defies court rulings, it could create a constitutional crisis, undermining the checks and balances of the federal government.

Beyond NIH, new reciprocal tariffs could disrupt the pharmaceutical supply chain, particularly for raw materials sourced internationally. Many commercial contracts include clauses that could be triggered, nullifying agreements and exacerbating supply shortages. Given the executive branch’s broad authority over trade policy, tariff changes could increase prescription drug costs and create economic instability. With Congress unlikely to reclaim tariff-setting power soon, the full impact remains uncertain, necessitating a “wait and see” approach.

 to watch the entire interview on Pharmaceutical Executive, our sister publication.

Ron Lanton, Partner, Lanton Law, examines the legal and economic impacts of reciprocal tariffs on the pharma supply chain, including potential disruptions and increased drug costs. 

Understanding the Legal Implications of Tariffs on the Pharma Supply Chain and Prescription Drug Pricing

How a Completely Open Generic Market Could Alter Rx Costs

, Geoffrey Joyce, PhD, director of health policy at the Leonard D. Schaeffer Center for Health Policy & Economics at the University of Southern California (USC, describes how the 10% tax on Chinese goods and a potential 25% tariff on pharmaceuticals could have notable effects on the price, quality, and safety of generic drugs. He explains that while branded and generic drug markets operate differently, the cost of generics is typically much lower, with intense competition driving prices down. A 10% tariff on generics might not significantly impact costs because most of the price is tied to distribution, not manufacturing. However, the COVID-19 pandemic highlighted the risks of relying on countries like China and India for essential generics, which has led to a push to bring production back to the U.S.

A 25% tariff would likely make domestic production more attractive, but generics are low-margin products, so this may result in higher consumer prices. Joyce suggests that tariffs could disrupt supply chains but not lead to significant changes in US production in the short term. Additionally, the low-profit nature of the business could encourage foreign manufacturers to cut corners, potentially reducing drug quality. California's failed attempt to create its own generic drug industry illustrates the challenges in stimulating domestic production for these low-margin drugs.

While tariffs might encourage some domestic production, it could come at the cost of higher prices and possibly lower drug quality. The overall impact on the drug supply chain remains uncertain, with concerns about reliability and safety, especially if foreign manufacturers face increased production costs.

Joyce also describes what makes the generic drug market susceptible to supply chain disruptions; how the tariffs can affect price or competition within the branded drug space; health policy developments that coming down the pike that the pharma supply chain should prepare for; and much more.

What are the benefits of a completely open generic market powered by cash?

When we look at the generic drug market, we've done studies comparing what insured populations pay for generic drugs, and although the prices, the markups in dollar terms tend to be small (in percentage terms), the middlemen—the pharmacy benefit managers, etc.—make a lot of money off generics to a point where I'm not even sure they should be insured.

I think you could take them out of the insurance market. We did a study where generally, Costco beat Medicare Part D. Why? Because Costco, basically gets drugs from a wholesaler and tries to have a minimal markup, and try, in essence, to deliver value to their consumers. Once you go through these webs of insurance chains, insurance companies, PBMs, and these black, opaque boxes of everyone skimming at the top, generics are more expensive than they should be. I think if you had a completely open generic market, and people had to pay cash for it, I think actually that would improve the market.

In the final part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Geoffrey Joyce, PhD, director of health policy at the Leonard D. Schaeffer Center for Health Policy & Economics at USC, describes how PBMs financially benefit from generics, and why a completely open generic market powered by cash would be beneficial. 

Will Tariffs Affect Branded Drug Prices?

Do you anticipate the tariffs affecting price or competition within the branded drug space?

Why are brand drugs so expensive on patent drugs? Well, it's typically pharma companies— whether people are fond of them or not—they've made big investments, maybe a billion or a couple billion dollars before that drug makes it to market. When they hit home runs and they develop a good drug, they charge us whatever the market's willing to pay. What it means is the cost of producing the drug—the marginal cost—is quite low, even for branded drugs.

Why are prices high? Because it's a successful drug with little competition, let's say, in that therapeutic class. And all your costs are fixed. There are research and development costs. In addition, the ones that make it to market and are successful have to pay for all the losers that don't make it to the market. Like generics, the cost of producing an additional pill tend to be quite small. If the tariff is on the active ingredients and the import from overseas, it may not be that consequential to the end price, but yet it can throw disruptions on who's producing and the incentives of producers. I think during COVID, we realized we should have some drugs that we produce domestically, because we're vulnerable if we don't.

In the third part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Geoffrey Joyce, PhD, director of health policy at the Leonard D. Schaeffer Center for Health Policy & Economics at USC, describes how the tariffs can affect price or competition within the branded drug space.

How Supply Chain Issues Lead to Drug Price Surges and Quality Concerns 

What factors makes the generic drug market susceptible to supply chain disruptions?

You may have four different labelers or manufacturers of these generic products, but they were all getting it sourced from the same supplier in China or India, and you realize, so if the FDA hypothetically shuts down a factory because of quality concerns in India or China, that can have enormous implications for the supply of that drug in the United States, because these four or five different companies selling it in the US are all getting their basic ingredients from the same supplier. It's a serious concern. I think the FDA has been a little reluctant to be too strict in policing these foreign production sites because of that dependency on one or two manufacturers. 

I think there's real concern—margins are low. We've seen this in the past where, hypothetically, there are two or three manufacturers of a particular anti-hypertensive or anti-psychotic, and the margins get low, and one of them drops out of the market. Then the other guys realize, hey, we're the only game in town, or there's only two of us in town, we can raise prices.

We have seen—even though the generic market in the US is very competitive and prices are very low—we've seen plenty of cases in the last five years where we see 100, 200, 300% increases in the drug overnight, and their prices, because one supplier has dropped out of the market, leaving a monopoly for the remaining supplier. It's a delicate market with low margins. If you tinker with that marketplace, you could have exits. Firms can say, I’m not going to produce that drug. I can make more money in another generic product. Or again, they may cut corners to try and keep costs as low as possible. And cutting corners can be consequential.

In the second part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Geoffrey Joyce, PhD, director of health policy at the Leonard D. Schaeffer Center for Health Policy & Economics at USC, details the factors that could makes the generic drug market susceptible to supply chain disruptions.

Impact of Tariffs on the Generic Drug Market

How will the 10% tax on goods from China—along with the potential 25% tariff on pharmaceuticals—impact the price, quality, and safety of generic drugs? Would the aforementioned tariff encourage domestic production?

We're speculating, but people don't realize there's two very different markets for branded drugs versus generics, different players, as you're aware. We have some of the highest branded drug prices in the world and some of the lowest generics. Generic competition in most cases—there are exceptions—is fierce. If you’ve been on the Mark Cuban website, Cost Plus Drugs, you look at the ingredient costs, it's a penny to five cents a pill for a lot of very common generics. Someone mentioned a 10% tariff on that where most of the cost of the drug is getting it from the manufacturer to the patients for generic drugs. I didn't think 10% would move the needle, even though, during COVID, we did see shortages of essential drugs. There was more of a realization in the US that we have to repatriate drug production for essential medications, because we could be vulnerable if we rely on India and China, etc., for supplying generic but essential medications.

The question is, would a 25% tariff encourage domestic production? It clearly tips the balance more so in the favor of domestic production, but these are really low margin products, so I think really the losers would be consumers in this case. Supply of drugs I think could be disrupted. I don't think we would see in the short term. We wouldn't see significant changes in production in the US. You do worry about if it's really a low margin business, and you've added tariffs that these foreign manufacturers are going to cut corners, and, like you mentioned, quality declines, and we've seen that. We have evidence of foreign manufacturers cutting corners and having less than high quality standards.

I think that's been the argument for repatriating, and California has tried to do that unsuccessfully. They said they're going to have their own generic industry. They basically get approval for two drugs, and really have not had great production of those to start with. So again, it's a low-margin business, making that attractive to the US. To US manufacturers: prices are going to be higher for sure. You worry that even if that's not enough to stimulate domestic production, it's going to have repercussions for the supply, the reliability of supply, and potentially the quality of drugs made overseas.

In the first part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Geoffrey Joyce, PhD, director of health policy at the Leonard D. Schaeffer Center for Health Policy & Economics at USC, outlines how the tax on goods coming from China and potential 25% tariff on pharmaceuticals could influence generic drug prices. 

The Rundown on Rebates

, Ed Schoonveld, value & access advisor for Schoonveld Advisory and author of 

, points out that the latest 15 drugs chosen for price negotiations under Medicare Part Dare not "negotiations" but rather government-mandated price reductions, based on a percentage discount determined by how far a drug is beyond its patent expiration. While the government has shown restraint in previous rounds, it’s expected that as more drugs are added to the list, Medicare pricing will experience a significant impact.

In this round, weight loss drugs like Ozempic, which have proven effective in managing diabetes, controlling HbA1c, and providing cardiovascular benefits, are included. However, these drugs are not yet approved for weight loss in Medicare patients, so their future role remains uncertain. While this could significantly affect Medicare pricing, Schoonveld notes that the private market is unlikely to be directly impacted by these changes in the short term. The government, however, influences physician fees for Medicare patients, which tend to be lower than those charged for privately-insured patients. This dynamic has led to the private sector subsidizing Medicare patients through premiums.

This trend may extend to drug pricing, where companies might raise prices in the private market to compensate for the government-mandated discounts in Medicare. Such changes could further strain the private sector, especially as employers and insurers are already expressing concerns about rising premiums and drug costs. Additionally, there is ongoing debate around potential restrictions on drug rebates, further complicating the financial landscape for both private insurers and consumers.

Schoonveld also offers a teaser on what to expect in his upcoming February “Value and Access” column.

What can readers expect from you February column?

 So my next column is going to talk about rebates. It's going to talk a little bit about, why are rebates bad? Why else would drug price controlling by the government be better? What are some of the drawbacks? What have we learned from some of the systems around the world? What are some of the drawbacks of that, and what are the points that we need to keep an eye on? What should be the focus of those programs, to make sure that we are keeping the patient in mind?

In the final part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Ed Schoonveld value & access advisor for Schoonveld Advisory and author of The Price of Global Health, previews his upcoming February column.

What Round II of Medicare Part D Drug Prices Signify for the Pharma Industry

With the Centers for Medicare & Medicaid Services (CMS) recently revealing its choices for the 15 latest drugs to be covered under Medicare Part D for the second cycle of price negotiations, what does this mean for future drug prices? What implications does this have for the private market?

 Well, they're not negotiations. That's the first part. Let's be very clear. This is a law that allows the government to basically dictate a percentage discount off the drug price, depending on how far this beyond patent expiration. Now the government has shown some restraint in the last round. I think we wanted to be careful not to maybe rock the boat too much. I expect over time—as more drugs are entering—this can have a substantial impact on the Medicare pricing. That's the goal, of course, as well. 

Now, in the current round, we're going to add 15 drugs. The next couple of rounds are going to be 15 drugs added. Of course, what you see here is that the weight loss drugs are added to the game. Ozempic is one of them. These drugs have clearly shown to be very good in helping diabetes patients with insulin, HbA1c control, and cardiovascular benefits as well, along with weight loss. Now, it's not approved for weight loss for Medicare patients, so that's something that we need to keep an eye on. We don't know where that's going to go. This is obviously a very big drug for Medicare, but also beyond Medicare.

It not going to influence the private market for now, because the private market is not at least directly influenced by this. So the question is, what's going to happen there? And interestingly, actually, if you do take a step back, Medicare fees for physicians are also dictated by the government—and they tend to be quite a bit lower than the commercial fees that are being charged for privately-insured patients—so the private industry is subsidizing Medicare patients beyond the normal Medicare premiums that everybody is paying. I expected something like that will happen here as well. 

It’s got to come from somewhere, so it will be required for companies if they want to market the drug successfully, to charge a little bit more in the private market to be able to afford these discounts in the in the Medicare market. That's a very sensitive topic, because nobody wants to pay more. The question is, what does it mean for the private market? If the budget or the willingness to pay is going to be even more difficult because insurance companies and employers are already complaining about the amount of money that you spend on premiums, the price of drugs, etc. We saw actually that at the end of last year, as part of a potential bipartisan government funding bill, the rebates were going to be handled. I don’t know exactly what the content was, but there were going to be some limitations on that.

In the first part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Ed Schoonveld, value & access advisor for Schoonveld Advisory and author of The Price of Global Health, comments on the future implications of the latest CMS drug price negotiations.

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