Drug supply chain members are making a lot of money: 5 things to know

Most members of the drug supply chain, including manufacturers, pharmacies, pharmacy benefit managers and payers, are cashing in on the rising costs of prescription drugs, a new Pew Charitable Trusts research report suggests.

For its study, Pew researchers compiled third-party data sets, government and industry reports, and survey findings to understand the prescription drug landscape. The study does not include drugs administered by a healthcare professional in hospitals or over-the-counter drugs bought without a prescription.

Five key study findings:

1. Net spending on drugs sold in pharmacies hit $341 billion in 2016, up from $250.7 billion in 2012.

2. Net revenue for pharmacies on retail prescription drugs more than doubled between 2012 and 2016, from $30.8 billion to $76.9 billion.

3. Pharmacy benefit managers passed on 91 percent of rebates to health plans in 2016, up from 78 percent in 2012.

4. After accounting for purchases and discounts, pharmacy benefit managers retained $22.4 billion; pharmacies retained $76.9 billion; manufacturers retained $204.6 billion; wholesalers retained $17.6 billion; and health plans, including Part D and Medicaid managed care, retained $19.6 billion.

5. During the study period, drug manufacturers significantly increased the amount of patient discounts, but net sales still increased. Drug manufacturers offered patients $49.9 billion in discounts in 2012, compared to $114.1 billion in 2016. But net sales rose from $179 billion to $204.6 billion.

Read the full report here.

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