Dr. Jeff Kane: The pharmaceutical shell game

I’ll sooner understand quantum theory than how drug prices are determined.

Here’s the short answer: “Pharmacy Benefit Managers.” PBMs are firms hired by health insurance companies to handle price negotiations, insurance claims, and distribution of prescription drugs. They also negotiate rebates from drug manufacturers and mail-service pharmacies. In theory, PBMs are designed to take advantage of the collective buying power of patients, enabling lower drug prices.