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The Complex Supply Chain of Prescription Drugs
In the complex world of healthcare, buying a drug involves multiple parties. Novo Nordisk, a drug manufacturer, sells to distributors like McKesson or Cardinal Health, who then sell to pharmacies such as CVS or local stores. When a customer goes to the pharmacy, they don't pay out of pocket; their insurance company does. However, insurance companies negotiate discounts with manufacturers through pharmacy benefits managers (PBMs). These PBMs receive rebates from manufacturers, keep a portion for themselves, and pass some back to the insurance company. With so many middlemen, healthcare transactions become intricate.