One of the biggest drivers of high drug prices in America is the opaque rebate system between pharmaceutical companies and insurance providers, where savings rarely reach the patient. In this episode, Vinay Patel explains how drug prices are formed, from R&D and manufacturing to complex negotiations involving insurers and pharmacy benefit managers. He breaks down the mechanics of rebates, formulary restrictions, and the consolidation of power among PBMs, showing how these hidden forces raise prices and limit access. He also offers promising alternatives like cost-plus pricing models and calls on employers to take control of their health care contracts to cut costs. Tune in and learn how this broken system works, and what it might take to fix it! Learn more about your ad choices. Visit megaphone.fm/adchoices