The recent contract agreement between Walgreen Co., the nation’s largest pharmacy chain, and Express Scripts Inc., the nation’s largest pharmacy benefit manager, is a harrowing illustration of the power PBMs now wield in the world of prescription drugs.
When the pharmaceutical giants split in January, Walgreen cited Express Scripts’ low reimbursement rates for medication. By refusing to work out a new deal months ago, Walgreen shined a light on the shadowy world of pharmacy benefit managers, which are notorious for charging employers high rates for medications and forcing pharmacists to sign contracts with low reimbursement rates. The money in between, known as “the spread,” forms the PBM’s lucrative profits.
Despite its effort to refuse Express Scripts’ terms, Walgreen quickly learned that it would not thrive without Express Scripts customers and caved to a deal (although neither party will reveal the terms).
Pharmacists across the country long have been frustrated by PBMs’ lack of transparency and their propensity for driving up drug costs. If Walgreen, whose roughly 8,000 outlets provide incredible market share, can’t survive without Express Scripts, that leaves little hope for independent, community pharmacists to flourish without tolerating egregious contract terms that ultimately drive up prices for consumers while the PBMs line their pockets. It’s time for increased oversight of PBMs. For consumers interested in better prices, that’s hardly a bitter pill to swallow. Read More…
Dave Marley • Washington, D.C.
President, Pharmacists United for Truth and Transparency