we have pbms and drug companies trying to do the same thing. and it's creating problemseraltied to stark law and kick backs, things where the government looked at a few years ago and said this is complicated, let's find less to do. but we're worried. our costs are going up at an unsustainable rate. and when i hear things well it's not the cost of the matters, it's the co'-pay, no it's the cost of the drug that matters. every time we have a conversation about drug costs, everyone does one of these. say say oh, it's the supply chain, the middlealman. and others say it's the cost to the companies that they're straight up buying them. >> last people want to jump in. we can go down the line, i guess. >> just go to the podium. >> i'll be quick. i'd like to agree strongly in part and disagree respectfully in part with these comments. i agree with you on the lost opportunity for user fee negotiations. i think unfortunately washington is what it is as we all cloe know. and don't underestimate some of the forces that don't want to attach that discussion

without pbm's, looking at premiums about 60% higher. value by building high-quality pharmacy networks and reducing prices. encouragexpertise to -- they achieved the health outcomes at a lower cost and they provide patient focused programs and tools aimed at improving health outcomes and avoiding unnecessary cost such as hospitalization. has appropriate that the htag is #whatsnext . ensure access and affordable and sustainable framework. we believe solutions should build on what is already working for government programs, employers, unions, and other organizations most americans rely on for health coverage. opportunityimmense to encourage an effective use of medicine to both improve health outcomes and significantly reduce unnecessary health care spending in the public and private sectors. we finally need to do things that increase competition for prescription drugs by facilitating faster reviews, identifying little or no generic taking a closer look at at the competitive practices to it when there is greater competition, employers, and

as a pbm we don't.e the employer, the patient, sees the actual pricing that's out there so they know that they're getting a good deal and we're doing our job and we're making money simply on a transactional basis. >> so it's going to be the old thing of who will watch the watcher, right right now -- >> correct >> right now the pbms are doing things that really aren't helping the health care system, aren't helping the manufacturer, the biotech company, or the pharmaceutical company, and clearly aren't helping the payer of the country >> we've got to leave it there, kyle but we appreciate you joining us good discussion. kyle fields. >> thank you very much >> beautiful shot. two great stadiums, fortunately one is the bengals, and the other is the reds. the north korea threat escalating the country tested an intercontinental ballistic missile over the weeks and experts say the missile could have the ability to hit alaska joining us now is james woolsey, a former cia director and former national security adv

for example point-of-sale rebates the pbm negotiates a sharp discounts come insurance company gets it but when a patient is inherited dockable she does not get the discount so she is paying three times more for the drug than the contractual price. if she knew when that point-of-sale was she would get that discount and maybe the congress would have to mandate that those patients get point-of-sale rebates. the degree to which he's paying more out-of-pocket more rapidly pushes her into the catastrophic forest of medicare part d so not only is she paying more than the contractual price but the taxpayer is paying so in our part d benefit it goes up dramatically. there's no way g. report on on that lays out very nicely so that transparency would save money for the patient and the taxpayer. secondly my state is one of you to do this, there is at least one which puts a gag order on the pharmacist and in some cases the cheaper for the patient to pay out-of-pocket than it is to go through her benefit. she pays more under her benefit a higher deductible and higher co-pay. the pharmacist if he te

oliver: in the business section, the way it has worked in the u.s., pbm's negotiate drug practices witheutical companies. consumerked to pallbearer. >>, cemented managers work on behalf of health plans, unions, anyone who was providing a health plan to employees. pharmacy benefit manager is to represent the health plan and its dealings with drug manufacturers and to negotiate discounts which are referred to as rebates from the drug manufacturers. less than plan pays the publicly advertised list price. that is the first that in understanding what to do. it is a lot more complicated. >> how's that working out in terms of reducing cost? cost to someduce degree for the health plans. the seeking of the rebates has the prefers -- perverse side effect of causing drug manufacturers to raise their list prices so that the price is higher and they can take from that higher list price. >> it is bigger rebates to the pbm's and they keep a slice of that rebate. they are basically -- they have an incentive to see the list price go higher. that would all be fine if nobody actually paid list price but t

give a bigger rate to the pbm's, so the pbm's reap a slice of that rebate.ve incentive to see the list price go higher so their percentage rebate goes higher. that would all be fine of don't actually paid the list price, but that is not the way the world works. in fact, a lot of people do pay list price. if you are among the millions of americans who still lack health insurance at this moment, and there may be millions more of those people if the republican obamacare repeal and replace bill is enacted, if you're one of those uninsured people, when you go to the pharmacy you pay list price. a medicareif you are recipient, there is a coverage gap in medicare where the recipients have to pay for their own drugs, again, you will pay the list price. carol: and a medicare recipient, if you go above that, all of a sudden you have to pay list price. >> correct. oliver: at first it seems here the price it takes to make the drug and distribute it, but i found it similar to when you go and buy a phone. phones have a very high list price from the manufacturer. ultimatel

it's in the pbms. >> simply put, i agree, who cares, they're not going to get anything done.are going to increase slightly this year as expected the bottom line is, people don't care about what comes out of elizabeth warren's mouth at this point. this is absolutely 100% more of a, you know, jumping on the bandwagon trying to bring out people to get against the republican establishment it has nothing to do with the issue at hand. drug prices will not be issued -- will not be changed. they can't be impacted by them and people, investors, understand that. >> all right let's get a check here on shares of alphabet. they're still down by just about 3% in the after-hours session. the conference call is just wrapping up. we'll bring you all the headlines moving that stock right now. much more "fast money" still ahead. so you miss the big city? i don't miss much... definitely not the traffic. excuse me, doctor... the genomic data came in. thank you. you can do that kind of analysis? yeah, watson. i can quickly analyze millions of clinical and scientific reports to help you tailor trea

you think that the biggest problem is not on your end of it, but through the supply chain maybe the pbmsou looked at patient out of pocket cost that is by far the biggest driver is insurance design now they also highlight these bad actors, the valeants of the world, which you guys report on and that's a problem, too, but we think scott gottlieb the new fda commissioner has it right, which is to really increase competition in what are those arbitrage opportunities in the generic market that have gotten a lot of headlines >> if i may just sort of switch gears a little bit and talk about alzheimer's just a bit so many people have loved ones afflicted with alzheimer's you had a major setback in december in terms of a trial which was a disappointment you were going to apply for fda approval but at the time you said it doesn't mean that alzheimer's research at lilly is over what can you tell us about that particular pipeline, some of the other trials involved with that same compound, and if that could actually be upside for investors who pretty much took that out of your market cap in terms of

plans, pbns, pharmacies, whole salers, industry leaders, as again a practical matters on the one hand pbmsscriptions in the country they use that leverage to help control costs and drive a hard bargain. the problem is the fruits of those negotiations over the last few years, they negotiated over 100 billion dollars in negotiated discounts they're not making their way to patients so, we degree that affordablety is a challenge for many patients >> do you think that the pharmacy benefits managers are middle men that are ineffective? if we negotiated discounts aren't making their way to customers, what's the point? >> i think the model's right for disrupti disruption we think the pricing model in our industry needs to evolve away from this rebate and discount model towards models that really reimburse the product based on the outcome achieved by the patient. and increasingly our members want to put their money where their mouth is they're sitting down and saying for diabetes patient, let's look at the metrics that really matter in improving care for people with diabetes whether it's a1c or kee