Tuesday, December 17, 2024

Biosimilars: The Next PBM Grift

 

On his most recent Wall Street earnings call, David Cordani, CEO of Cigna, recently signaled that his company is bullish on biosimilars. On the surface, this might seem like a win for patients—biosimilars promise to slash drug prices, increase competition, and expand access to life-saving treatments. But here’s the catch: When a PBM like Cigna’s Evernorth starts salivating over a market, you can bet it’s less about helping patients and more about exploiting another profit lever in the healthcare racket.

Let’s pull back the curtain on this so-called biosimilar revolution and how it could be twisted into just another PBM-fueled grift.

PBMs: Masters of Middleman Shenanigans

Pharmacy Benefit Managers (PBMs) are the gatekeepers of your prescriptions, deciding which drugs make it onto formularies and at what price. In theory, they’re supposed to lower costs through negotiation. In practice, they’ve turned into predatory monopolists who inflate prices and pocket the difference through rebates, fees, and opaque deals with manufacturers. Biosimilars, cheaper alternatives to biologics, could be the latest tool in their arsenal to keep the scam alive.

How the Biosimilar Grift Could Play Out

  1. Formulary Manipulation for Maximum Profit
    Evernorth might stack its formulary with "preferred" biosimilars from manufacturers offering the juiciest rebates. Patients could be forced to switch medications, not for better outcomes, but to maximize Evernorth's cut. And while rebates drive up list prices, those savings rarely trickle down to patients.
  2. Artificial Price Floors
    Biosimilars are cheaper—on paper. But in a PBM-controlled market, prices could be engineered to stay just high enough to pad margins while still undercutting branded drugs. Patients see little relief, and PBMs laugh all the way to the bank.
  3. Co-Branding for Market Domination
    If Cigna follows CVS’s Cordavis playbook, it could launch its own "in-house" biosimilar brand. This would effectively lock out competitors while consolidating control over both drug supply and pricing. More power, less transparency.
  4. Non-Medical Switching
    Cigna might pressure patients to switch to biosimilars, not because it’s clinically necessary but because it’s financially lucrative. If your current medication works well, tough luck—your insurer knows best, apparently.
  5. Bundled Plans That Limit Choice
    By bundling biosimilars into employer-sponsored plans, Cigna could box out competing options entirely. Employees are stuck with whatever Evernorth deems most profitable.
  6. Opaque Rebate Games
    PBMs thrive on rebates—a polite word for kickbacks. With biosimilars, Evernorth could crank up this model, taking a bigger slice of the pie while keeping patients and employers in the dark about where the money is going.

Who Really Wins?

Not patients. Not employers. Certainly not taxpayers footing the bill for ever-ballooning healthcare costs. The PBMs win—again. They’ll claim they’re saving the system billions while quietly siphoning off as much value as possible for themselves.

The Path Forward

The biosimilar market does have the potential to disrupt the pharmaceutical status quo, but not if PBMs control the narrative. To make biosimilars work for everyone, we need transparency at every level—pricing, rebates, and formularies. Patients deserve to know why their drugs cost what they do and who’s profiting. Employers need to demand contracts that hold PBMs accountable. And DC lawmakers need to get behind the new “Patients Before Monopolies” (PBM) Bill to break the monopolistic chokehold PBMs have on the healthcare system.

Until then, Cordani’s enthusiasm for biosimilars feels less like innovation and more like the next PBM grift.



Biosimilars: The Next PBM Grift

  On his most recent Wall Street earnings call, David Cordani, CEO of Cigna, recently signaled that his company is bullish on biosimilars. ...