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Pro Analysis

Breakingviews: Pharma's middlemen will feel the squeeze in 2017

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The pharmaceutical industry's middlemen face a 2017 clampdown. The U.S. medical system's opacity and complexity have stoked drug prices, fueling the flow of dollars to insurers, wholesalers and pharmacy benefit managers (PBMs). The growth of high-deductible insurance – primed to accelerate under the incoming Trump administration – will bring much-needed transparency to the market, and unaccustomed pressure on these firms.

Mylan may have jacked the price of its allergy pen to $600, but few pay that much. PBMs like Express Scripts arrange discounts but don't disclose all the terms to clients. Pharmacies and wholesalers like McKesson take a cut. The result is an opaque, inefficient mess.