The End Of Medical Middlemen in the American Healthcare System?

A dictionary definition of fraud reads “an act of deceiving or misrepresenting.”  It matches what's happening with middlemen who can’t justify why a $5 pill in Brazil sells for $100 in the U.S., even though the same company manufactures the drug. Middlemen are plentiful and prosperous in the American healthcare system, but recent developments suggest their business is threatened.

Medical middlemen, or pharmacy-benefit managers, have pocketed large profits through opaque pricing methods for years. But now, lower-cost options from Mark Cuban,  Amazon, and numerous startups pressurize their business.

Startups like GoodRx Holdings (GDRX) Capsule, Blink Health, and more help consumers seek lower generic-drug prices. They sell drugs for their cost plus a reasonable markup, saving customers hundreds of dollars monthly on prescriptions.

Recently, Amazon announced a new benefits program for Prime members, offering unlimited access to generic medications for $5 a month. Mark Cuban Cost Plus Drug Co. also aims to provide lower-priced generics by cutting out middlemen and charging manufacturer prices plus a consistent markup.

At Cost Plus, the cancer drug Imatinib costs $14.40 for 30 pills. In contrast, it could be as high as $950 at other pharmacies. Experts don’t expect excessive markups to disappear immediately, but competition from upstarts is good news for consumers who know they can get generic drugs much more cheaply.

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