Why Your Meds Cost So Much: The Hidden Power Of PBMs Revealed

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In this interview, trial lawyer and bestselling author Mike Papantonio pulls back the curtain on Pharmacy Benefit Managers (PBMs)—the secret middlemen driving up medication costs.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Mike, the middleman delves into the hidden world of PBMs and pharmaceutical pricing. What drew you to this, uh, particular subject for your latest novel?

I brought a case against the, the PBM industry. It's a national case. Typically what I do, these books that I produce, there's seven of them, and they're all based on actual cases that, that I've handled. The tobacco case that was, that originated, if you can imagine right here in Pensacola, the, uh, opioid case, the national opioid case originated here, human trafficking. So we, we are, uh, uh, the firm is not a one 800 car crash case. It's, it's a firm that specializes in these really unique kind of social, bigger social issues. This is one that, you know, we almo, we, we filed as an antitrust case, Lorraine, because we saw that the companies had a very clear plan on how to mark up insulin, uh, 1500%, and then as high as 2500%. So we brought a case against him and I, I'm very optimistic that it's gonna go well.

But the PBMs, the problem Lorraine, is people simply don't understand it. If you ask 10 people what it is, they would have no, no idea. And unfortunately, it's costing them 40 or 50% higher money on every prescription that's been filled. I equate it in the book middleman. I use, um, I really use the mobster structure. Uh, matter of fact, the lead, one of the lead characters in here is a mobster from Ireland who comes to the United States and says, gee, wizz, this is better. This is better than I could do with cocaine, heroin, whatever we sell, I can do better with the legal pharmacy industry. So he moves into the PBM industry, and unfortunately, it's a, it's a cabal where kickbacks take place, extortion takes place, antitrust takes place, price gouging takes place. And the awful thing about it is nobody even knows what's happening.

So with this book, you're able to, I, I feel like you're able to read a, a good story. It's definitely a page turner, and at the same time, you come away with information that you had no idea really existed. And if you Google any part of the actual structure of the PBM and the discussions about PBM in this book, you'll find ev every bit of it is absolutely true. Um, and it's just a reflection of the, the lawsuit that we're bringing. But it's fictionalized, you know, there the murders that take place in those types of things that, you know, that's part of the fiction process. But at any rate, it's taught it. People listening to this right now would have no idea that for the last 11 years, their copays on pharmaceuticals have gone up every single year. And the reason that happens is because the PBM is what we call, the reason I call it middleman.

Um, it's interesting, I brought the lawsuit and we used the term middleman in that lawsuit. New York Times picked that up, and they wrote an entire expose on the middleman. And that's the first time that there's ever been any serious discussion about PBM and corporate media. But what they do is, you, you have this entity, the pharmaceutical maker has got to go through the PBM as the middleman before that drug is then used at the pharmacy. What the PBM does, it says a couple of things. First of all, we're going to set the price of the drug. And they know the higher they set the price, the bigger what they call rebate. It's nothing more than kickback. It's a kickback that they get from the pharmaceutical company. That's the first thing they do. The second thing they do is if Pfizer, for example, produces a new pill, but there's five other pills that do exactly the same thing, the PBM makes the decision, unilateral decision on which one of those pills is gonna be paid for by insurance. So, uh, you, you understand, it's, it's, it's the, so

They're very powerful. Oh, they have a lot of influence, and they're basically, the average person has no idea. I wonder if you could talk about how these, uh, PBMs came to be in the position that they are and so powerful.