Are PBM’s driving up the cost of medications?
This NYT piece is provocative.
https://lnkd.in/gvQCJT2B
“The job of the PBM is to reduce drug costs. Instead they frequency do the opposite.”
Knowing how your PBM makes money is likely the most important component to optimizing your health plan’s Rx spend.
Here are the most common:
1) ADMIN FEES- these should be straightforward as either a PMPM, PEPM, or per script fee. All 3 methods are transparent and simple.
2) SPREADS - the cost of the acquired drug is marked up by the PBM to profit the PBM.
3) MANUFACTURER REVENUE - retained rebates, fees, and other remuneration from Rx manufacturers
4) CHANNEL OWNERSHIP - the big 3 PBMs and many others, own their own mail order pharmacies (mandatory use is common) and specialty pharmacies. The 3rd biggest pharmacy in the US is UHC.
5) DIR FEES - These fees may include "pay-to-play" fees for network participation, periodic reimburse-reconciliations, or non-compliance with quality measures.
The point of using PBMs is, by-large, to reduce/minimize Rx spend. I’m not certain that this is happening. This may all seem trivial, but the PBM market is expected to reach US$ 683590 million by 2028. When the PBM is big enough to acquire the insurance co, we need to pay attention. The patient, after all, funds the entire thing.
