3 Signs the PBMs are Desperately in Need of Reform

The Hill
DR. BENJAMIN ALLI, OPINION CONTRIBUTOR  published on 04/15/19
 
A new Trump administration rule is forcing drug middlemen known as Pharmacy Benefit Managers (PBMs) to direct some of the rebates they receive back to the consumers they're supposed to be representing has sparked a major lobbying brawl in the health-care industry.

The specific Trump proposal is relatively narrow: it requires PBM drug copays to be based on what they pay wholesale for a drug, instead of its list price, thereby guaranteeing that consumers realize the gains instead of the middlemen.
But the policy is one of the first significant blows against the increasingly powerful PBMs.

PBMs are supposed to use their market power to negotiate better drug plans for the insurance plan enrollees they represent, but in the past several years, evidence is mounting that something is very wrong in their corner of the health-care universe.

Here are five signs this industry is desperately in need of reform:

Copay costs more than the drug? Wait, what?

Most people think they pay hefty insurance premiums so that when they do need care, the insurance companies pay most of the cost. By and large, that's true. But now an increasing number of patients are having the bewildering experience of finding out their prescription drug is cheaper to buy out-of-pocket. Sometimes much cheaper.

Last summer, PBS published a groundbreaking expose on the practice, highlighting an academic study which estimated copays are above the rates reimbursed to pharmacies an astonishing 25 percent of the time, resulting in a $135 million in annual revenue.
The story also includes one of the most remarkable "liar, liar, pants on fire" interactions ever between Express Scripts, one of the three big PBMs and PBS. Asked for comment, Express Scripts stuck to its increasingly untenable denials, even when confronted by the testimony of numerous pharmacists, internal company documents and an on-the-record admission from their insurance plan partner.
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