No one disputes that the American health care system has more pain points than we’re ever able to identify. But one of the core issues is prescription drug pricing, including who sets the prices, how they get set, and what, if anything, can be done about it.
At the center of our prescription drug distribution system is a group of middlemen known as pharmacy benefit managers (PBMs) — powerful corporations that play an outsized role in our access to prescription drugs and the flow of dollars surrounding them.
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In fact, PBMs spend an exorbitant amount of time, money, and energy trying to convince elected officials, the health care market overall, and we, the consumers, that they are vital to reigning in prescription drug pricing.
Currently, PBMs are not legally required to — and therefore do not — disclose to pharmacies how much money PBMs are collecting from payers, i.e. insurance companies. Nor do they report to insurance companies how much money PBMs are reimbursing the pharmacies. PBMs also refuse to report how much money drug manufacturers are giving them in the form of rebates, nor will they disclose just how much PBMs are marking up prescription drug prices that we all pay for.
PBMs contend that if they actually were to be transparent about their business and pricing protocols… pharmacies, drug manufacturers, insurance companies, Medicaid, other payers, and patients alike would all be worse off.
Excuse me while I wipe up the milk that shot through my nose just thinking about the absurdity of that logic.
Does the system I described sound legitimate to you, on any level? PBMs are intentionally secretive and make the system so confounding with the hopes that all involved will simply throw up their hands in frustration and give up.
So far… it’s been working for PBMs. Only the facade is starting to crack.
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I was a community pharmacist with my own business and experienced first-hand how debilitating the practices by traditional PBMs were on pharmacists, the system and ultimately patients.
The three largest traditional PBMs control an astounding 80 percent of the market. To be fair, some traditional PBMs are good stewards and provide valuable health care services and they do so in an ethical manner.
After I closed my pharmacy, I knew I had to do something to help reign in these unwieldy practices. That’s why I created what’s called a pass-through PBM, -- there are a handful of other PBMs operating with this model. The pass-through model means simply this: prescription drug prices aren’t jacked up. Information isn’t hidden. Openness and transparency are valued above all so everyone in the system knows how much money is being allocated to and from all parties, and in which directions.