The Problem with PBMs
There is a serious problem in the industry for prescription drugs. Between the insurance and patient level are large Pharmacy Benefit Managers (PBMs). These big time players determine what drugs are actually covered on a patient’s insurance plan. PBMs sit in the middle of drug manufacturers and patients, often driving up the price of prescriptions. The cost of a prescription fulfilled is not what patients pay. Pharmacies get reimbursed by insurance companies and PBMs, but PBMs are taking larger and larger percentages of the reimbursement due to pharmacies. Everyone on the chain of prescription drugs gets their fee. However, PBMs are now taking an unfair share. An example given by an “Impact Report” on PBMs stated that “From 2014 to 2018, the net price received by insulin manufacturers decreased by 31%, but at the same time, the share earned by PBMs increased by 155%” These PBMs are putting a strain on pharmacies on a large scale.
PBMs claim to help their members with promises such as coupons and rebates. However, PBMs are negotiating on prescriptions prices with the major manufacturers for the insurance companies. This has them making billions of dollars in annual profits. They are taking big money from the manufacturers for pushing their meds, and the so-called rebates are only being absorbed by the PBM, and not really being delivered to the patient as promised.
In the pharmacy market, PBMs are creating serious problems for the little guy. Smaller independent pharmacies are being strained by PBMs who are steering patients away to the larger chains. PBMs and insurance companies are trying to keep pharmacies quiet, and patients uninformed on other options for prescriptions. Some drugs from these PBMs are actually cheaper when paid out of pocket. This is a fact that they do not want you to know and is resulting in patients paying more in copayments. The PBMs are trying to force patients into their own pharmacies and affiliates rather than the smaller independent shops. Mail order pharmacies generated by PBMs too are cutting into the profitability of small-town pharmacies. Prior authorization processes imposed by Insurance and PBM are making it harder for patients to get the proper meds for treatment. PBMs are trying to dictate where and at what cost a patient can fulfill their prescription, and it is largely unethical.
Measures need to be made within the pharmaceutical industry to prevent PBMs from taking the lion share of prescription drug costs, while promising unrealistic savings. Independent pharmacies are suffering, while the PBMs hide behind a lack of transparency.