Pharmacy business managers (PBMs) control the cost of prescriptions for patients. This might sound like a good thing – theoretically, by monitoring prescription costs, PBMs are supposed to increase access to necessary medications.
But these prescription regulators might actually need to be regulated themselves, per a recent op-ed in Healthcare Dive.
In the piece, antitrust attorney and former policy director of the Federal Trade Commission David Balto sets his targets directly on PBMs.
Why? Apparently, they’re trying to pull a “rebate scheme” on patients. And Balto pulls no punches: “Like middlemen in other industries, they don’t actually produce anything. They simply decide which medicines to cover — and which ones to exclude — and at what prices. Yet they pocket a huge portion of every dollar spent on pharmaceuticals.”
We’ve said it before and we’ll say it again: we have our eyes on PBMs because the three biggest organizations own 85% of the market, and all three are either owned by or affiliated with three of the biggest insurance carriers.
See for yourself:
- CVS Health Caremark is owned by the same parent company as Aetna
- UnitedHealthcare has OptumRx
- Cigna has Express Scripts
- And while not quite in the top three, but still worth mentioning, Anthem runs IngenioRx
So why are all the major carriers in on the PBM game? Because it’s mega profitable. And since these companies generally seem more motivated by profits than by principles, we might need the big dogs to ensure that profit isn’t at patients’ expense.
Big dogs like Congress. Regulators. Someone. Anyone.
“The PBM market lacks the three elements essential for competition — choice, transparency and a lack of conflict of interest,” Balto said in the article. He conveniently also outlined three ways Congress could fix this situation:
One: mandate transparency by requiring regular reports around costs, fees, and rebates. (Seems like a no-brainer to us.)
Two: require that PBMs actually pass more rebates on to patients, keeping a fixed fee rather than an undisclosed percentage.
Three: prohibit PBMs from charging patients and health plans more than what the drug actually costs. (As we’ve talked about here.)
And at this point, we’d take any of the above.