Business
Senators Back Bill to Tackle Big Pharma’s Rocketing Prescription Drug Prices
The MEPA Act would scale back incentives to jack up prescription drug prices at pharmacies.
Built-in structures to incentivize jacking up drug prices in pharmacies, and prey on seniors, could soon be whittled down.
Sens. Maggie Hassan (D-NH) and Bob Menendez (D-N.J.) were among those who voted Wednesday to advance a bipartisan bill she personally helped develop to reduce the rocketing cost of prescription drugs and the way pharmacy managers benefit from rising drug prices.
The Modernizing and Ensuring PBM Accountability (MEPA) Act, which passed the Finance Committee July 26 on a bipartisan basis, reduces the cost incentive for pharmacy benefit managers (PBMs) to prioritize more expensive drugs because they receive higher payouts for higher priced drugs.
Drugmakers say that the rising rebates they must pay PBMs are forcing them to jack up prescription drug prices. According to a recent analysis, drugmaker rebates to PBMs increased from $39.7 billion in 2012 to $89.5 billion in 2016, partially offsetting list prescription drug price increases. PBMs say, however, that they have been passing along a larger share of the money to insurers.
“Last year, we took on Big Pharma by giving Medicare the ability to negotiate drug prices, and we must continue to stand up to the health care industry and help people afford the medications that they need,” said Senator Hassan. “This bipartisan legislation will ensure that pharmacy benefit managers don’t push people to more expensive drugs just so that they can get a larger payout, saving seniors their hard-earned money while also saving taxpayer dollars.”
HIV drugmaker Gilead Sciences was slammed for its PBM Express Scripts because it jacked up the prices of its lifesaving hepatitis C cures Sovaldi and Harvoni. But Gilead later changed its tune and joined a chorus of drugmakers—turning on PBMs. “I have never met, in this entire experience, a PBM or a payer outside of the Medicaid segment that preferred a price of $50,000 over $75,000 and a rebate back to them,” Jim Meyers, executive VP of worldwide commercial operations for Gilead told Bloomberg in 2017. “We have a system that’s incentivized upon rebate revenue.”
What Would Change Under The Modernizing and Ensuring PBM Accountability Act
The bill would lower prescription drug costs and is estimated to save $1.7 billion in taxpayer dollars. It makes a few adjustments to common PBM practices and transparency requirements under Medicare Part D, which the Senator outlined as follows:
- PBMs often prioritize coverage of more expensive drugs because part of their compensation is calculated through the list prices of drugs. This legislation will break the link between drug prices and how much pharmacy benefit managers are paid, so there is no longer a financial incentive for these companies to push patients to buy more expensive medication.
- This legislation will ban the practice of “spread pricing” in Medicaid, in which pharmacy benefit managers negotiate a lower price with a pharmacy but charge a higher price to the health plan, pocketing the difference.
- The legislation also includes a bipartisan measure that Senator Hassan led to ensure that pharmacy benefit managers report transparently on how they price low-cost generics and biosimilar medications, allowing more visibility into whether people can easily access these generics.
Sen. Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Finance, said the Modernizing and Ensuring PBM Accountability (MEPA) Act includes his own inclusion, the Patients Before Middlemen (PBM) Act, joined by Marsha Blackburn (R-TN), alongside Senate Finance Chairman Ron Wyden (D-OR), Senate Finance Ranking Member Mike Crapo (R-ID), Sen. Jon Tester (D-MN), and Sen. Roger Marshall (R-KS).
“For too long, PBMs have held a vise grip over the prescription drug supply chain—price gouging hardworking families and seniors alike. Through the current incentive structure, whereby they turn a profit as a percentage of the list price of a prescription, PBMs wield their influence to have health insurers cover more and more expensive drugs—even when cheaper options are available,” said Sen. Menendez. “My Patients Before Middlemen Act, which I’ve introduced alongside Senators Blackburn, Wyden, Crapo, Marshall, and Tester, would replace the complicated scheme of opaque rebates and administrative charges with a flat fee—one that is negotiated before entering into a contract. By delinking PBM compensation from drug prices, we help lower prescription drug costs for Medicare Part D beneficiaries and better align incentives in the market. Our bipartisan Patients Before Middlemen (“PBM”) Act would curb the biggest abuses in the PBM industry today.”
Multiple factors impact skyrocketing drug prices—and when it’s a lifesaving drug, people will pay anything. Between 2007 and 2018, the cost of some insulin products increased by over 200%, according to a study published in 2022 in The Lancet. Most famously, “Pharma Bro” Martin Shkreli jacked up the price of lifesaving antiparasitic medication Daraprim, for people with HIV, in 2015 by 4000%. He also allegedly created an elaborate scheme to deny the entry of generic drug competition from getting a piece of the pie.
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
AI & Technology
Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations
Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).
The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.
Trial Push Despite Multi-Million Euro Settlement
The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.
Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.
A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.
Allegations of VAT Evasion Through Marketplace Sellers
At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.
Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.
Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.
Italian Government Named as Affected Party
In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.
Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.
Multiple Investigations Add to Pressure
The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.
Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.
In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.
Amazon Denies Allegations
Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.
Broader Impact on Europe’s Digital Economy
If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.
With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.
Aviation
IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?
Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.
Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.
Root Cause: IndiGo’s Market Monopoly
The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.
This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.
Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.
Government Intervention and Regulatory Weakness
The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.
Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.
The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.
If Telecom Giants Fail: A National Paralysis
The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?
If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.
In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.
E-commerce Monopoly: Another Fragile Ecosystem
The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.
Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.
A Wake-Up Call for Regulators
The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.
As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.
Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.
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