The US government requires that they receive the lowest public price for any medical care they pay for. Unfortunately, the US government is a very expensive customer to work with for many reasons. By sandbagging costs with very high public prices, it gives healthcare providers the latitude to, after various hidden discounts, charge the government more than private sector customers that actually cost them less to serve.

It is a perverse incentive created by the government insisting on the lowest price but having a very high overhead cost to deal with relative to everyone else that has to be paid for. Far from ideal but that is where we are. Quite a few fake prices in regulated markets can be explained by the government requiring that they receive the lowest price while incurring an unusually high cost overhead to the vendor.

It hinders individuals from making purchasing decisions that affect price. Less clarity on the actual price means that it's harder to shop around.

It's confusing, but each payer (insurance companies) negotiates a series of prices for things. Each one is a unique, bespoke, business deal -- and this is why prices are never clear: the cost of something is unique to the deal hammered out by an individual insurance company and individual health care provider networks.

Different payers will come up with their own unique take on health care coverage prices, favoring some things (lower costs) over others. Some may favor prenatal care and maternity, some may favor meat-and-potatoes basic health needs over specific categories of care. Larger payers may get a percentage point or two average-over-everything lower, smaller ones may favor a particular subcategory to create what they feel is a "good enough but still competitive in some key marketable categories" package. Each one is bespoke and quite varied.

From the outside, it can look insane: you walk into a hospital and ask how much a procedure costs, and the person at the desk is honestly confused and honestly has no answer. The reason? The cost is entirely relative to the cost structure package hammered out by a specific insurance company - there isn't really a fixed "cost" per se.

I take a fancy medication every week with an MSRP adding up to over $7,000 a month. Even with the cheapest insurance on my state's marketplace, I pay $0 for the drug because of a manufacturer copay savings program. This arrangement also happens to delete my yearly deductible and out-of-pocket max astonishingly quickly, making most of the rest of my healthcare free.

I have literally no skin in the game. Speaking as one of the winners in this charade, this whole thing is so stupid. It makes you wonder why they don't set drug MSRPs even higher.

PBRs have contracts with medical insurance. They get paid based on how much money they "save" the insurance company.

"Save" is defined as list price minus contracted price that the insurance pays for the drug.

PBRs manipulate the list price to be higher so that they "save" the insurance company more money.

They also manipulate the co-pays so that patients will choose drugs that "save" the most, as opposed to the lowest price drug.

The US healthcare system is a patchwork of policy, local incentives, and unchecked capitalism that barely works, some of the time. You can read intent into it, but it's really just a big mass of inscrutable complexity.

That said, a lot of the time, inentionally or not, the answer is "it facilitates the transfer of money to the shareholders of the big private health insurance companies"

The sellers can write it off as a loss. It’s a way to avoid paying taxes