In the article, “Attacks on Pharmacy Benefits Managers Won’t Reduce Drug Prices,” Ike Brannon pleads with the reader not to see pharmacy benefit managers (PBMs) as “the bogeymen they have been made out to be,” and he attempts to recast them as champions of healthcare industry savings.
Here is a quick description of who PBMs are and what they actually do to set things straight: PBMs are essentially middlemen who make obscene profits playing a sophisticated arbitrage game. Last year, one of the “Big Three” PBMs—Express Scripts/Evernorth—made $153.5 billion in revenue, which made up nearly 80 percent of the revenues of its parent The Cigna Group, which, in turn, holds the Cigna health plans.
How can a humble PBM, supposedly working to drive down healthcare costs on behalf of health plans, get richer than the health plans?
A PBM sits between the health plan, the pharmacies in the plan’s network, the drug companies, and the plan members. The PBM wheels and deals between the four groups of stakeholders, taking full advantage of the lack of transparency to keep copays and coinsurance high for plan members, drug prices high (to support higher rebates from drug companies), health plan administrative fees to PBMs high, and pharmacy reimbursements high for the pharmacies owned by the PBMs. For non-affiliated pharmacies, PBMs drive them out of business through predatory practices such as sub-cost reimbursement or by forcing the pharmacies’ patients into the PBMs’ own mail-order constructs. All this adds up to billions of dollars in PBM profits, none of which go back to providing more healthcare access for more Americans.
As a nonprofit healthcare provider that serves people living with HIV, AIDS Healthcare Foundation is keenly concerned about the unregulated role PBMs play in determining how, where, and even if a health plan member can access their prescription drugs. PBMs—through their shadowy, off-shore purchasing entities—make deals with drug companies to add, exclude, or restrict access to HIV treatments based on what is most profitable to the PBM, not what is best for the patient. PBMs fragment a patient’s care by forcing them out of their trusted pharmacy and into the PBMs’ own mail-order constructs.
Are PBMs “bogeymen?” We believe they are oligarchic, anti-competitive creators of pharmacy deserts—and bad for patients’ health. And, in fact, these concerns are driving Federal Trade Commission investigations and congressional hearings, as policymakers consider how to create a fair, equitable playing field that provides more healthcare services for more people at lower cost.
