American businesses spend hundreds of billions of dollars a year on prescription drugs, and the bills keep getting bigger. But some of the companies promising to help rein in those costs prevent employers from looking under the hood.
Why it matters: Documents provided to Axios reveal a new layer of secrecy within the maze of American drug pricing — one in which firms that manage drug coverage for hundreds of employers, representing millions of workers, obscure the details of their work and make it difficult to figure out whether they're actually providing a good deal.
The big picture: Americans spent $370 billion on retail prescription drugs in 2019, and employers shouldered about $166 billion of that, according to federal data.
How it works: Employers hire pharmacy benefit managers to handle the drug coverage in their workers' health insurance plans. PBMs negotiate prices with drug manufacturers and decide which drugs get preferential treatment.
Zoom In: Aon, a major global benefits consulting firm, runs one of the largest drug pricing coalitions. It includes more than 400 large companies and 2.4 million insured people, according to the Aon documents provided to Axios.
So what are employers not seeing within this coalition? The data on prices, and understanding whether those prices are a good deal.
Details: The Aon coalition documents place tight limits on employers' ability to access information about their drug costs — and on their ability to analyze that data, if they can get it.
What we're hearing: Several people who work in the industry, who asked not to be named due to the confidential nature of coalitions, said most employers, regardless of how big they are, have no idea what they're giving up when they enter coalitions.
The other side: Executives at Aon and Express Scripts declined several interview requests.
Context: The secrecy and complexity of the drug pricing process goes beyond this coalition.
The bottom line: Employers foot a large chunk of the bill for millions of workers' prescriptions. But secretive contracts, which are nothing new in health care, are blocking employers from understanding whether they are paying reasonable drug prices.