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NEW YORK (TheStreet) -- Pharmacy Benefit Managers (PBMs) are disguising price hikes under the guise that they're looking out for the consumer, argued Black Rock Pharmacy co-owner Brad Arthur on CNBC's "Power Lunch" on Friday afternoon. 

The interview came after pharma company Mylan (MYL) has been under fire this week for raising the prices on a pack of two EpiPens from about $100 in 2007, when the company acquired the product, to about $600. 

The advocacy groups that have been speaking out this week are "trying to distract attention from what the real issue is," Arthur said.

The real issue is competition - or a lack of it, Arthur continued.

To fix this issue, the U.S. needs more transparency on the way drugs are both priced and paid for, he asserted.  

"There's a huge issues with the PBMs. I think the real issue with the PBMs is that they operate within a sphere of secrecy and they don't wish to discuss the manner in which they price pharmaceuticals," he said. 

While PBMs say that they're managing costs on behalf of pharma consumers, "they're doing nothing more than preserving their particular segment of the healthcare spent with respect to prescription drugs," Arthur said.

Black Rock Pharmacy works with 18 to 20 PBMs on a daily basis, but the pharma company has "no leverage against these large entities," he said. The contracts with PBMs are unilateral, meaning PBMs tell Black Rock how and when they're getting paid, he said.

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But because Black Rock is dependent on these PBMs for such a large portion of his business, he can't turn them away, Arthur explained.

"They exert their leverage on the marketplace at will," he concluded, adding that PBMs have some explaining to do. 

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings team rates Mylan as a Buy with a ratings score of B. This is driven by several positive factors, which the team believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers.

You can view the full analysis from the report here: MYL

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