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BIO Launches New Video Explaining How The Cost of Your Medicine is Really Determined

October 26, 2016
Today, much of the public debate surrounding the cost of biopharmaceuticals is focused on the list price of an individual drug or treatment regimen.

However, the list price is not what a manufacturer generally makes on the drug, and it typically has little to do with what a patient has to pay for his or her medicine.

To help put this debate into context, the Biotechnology Innovation Organization (BIO) is releasing a new educational video today designed to give patients, consumers, policy makers and journalists a better understanding of how prescription drug costs are really determined and where the pharmaceutical dollar actually goes.

This short video, Understanding Your Drug Costs: Follow the Pill, begins with a typical transaction at your local pharmacy. It then traces that purchase back through a series of complex transactions that occur throughout the pharmaceutical distribution and insurance chain. The video breaks down the differences between the list price and the net price of a medicine, explains how the various actors (e.g., pharmacy benefit managers (PBMs), wholesalers, insurance companies, etc.) in the health care ecosystem operate to deliver medicines to patients and at what cost, and demonstrates why it is that a biopharmaceutical company has very little power to determine what a patient ultimately pays for his or her medicine.

To learn more, visit Understanding Your Drug Costs: Follow the Pill