About PPA   |   Sign In   |   Join Now
Pharmacy Benefit Manager FACTS
Share |

What are PBM's?

Pharmacy Benefit Managers (PBM's) are the administrators of an insurance plan's prescription drug benefit program.  They contract with employers, unions, and insurance companies to administer prescription drug benefit programs, set compensation formulas for pharmacy payments, arrange and collect rebates from manufacturers, establish formularies (preferred drug lists), and determine patient co-payments. In addition, they are the sub-contractor for prescription drugs for the State of Pennsylvania's Medicaid program.  

 

 

What is the issue?

Initially established as administrative processors of prescription drug claims for health plans over time PBMs have transformed into major players in the prescription medication world.

 

Since 1987, when Advance PCS/Caremark (now CVSHealth) became the last of the original "big 3" PBMs to incorporate, the others being Medco and Express Scripts which merged in 2012, total prescription drug expenditures have skyrocketed 1010% and per capita expenditures have increased 756%.

 

According to a report by Applied Policy, over the past decade, the role of PBMs in the delivery of health care has increased, due to a confluence of factors: coverage expansions under both the Medicare Part D prescription drug benefit and the Affordable Care Act, combined with an increase in prescription drug spending that has motivated commercial health plans and self-insured employers to outsource the management of their spending on outpatient prescription drugs.

 

And, per an article in The American Prospect, over the past 30 years, PBMs have evolved from paper-pushers to significant controllers of the drug pricing system, a black box understood by almost no one. Lack of transparency, unjustifiable fees, and massive market consolidations have made PBMs among the most profitable corporations you’ve never heard about."

 

The lack of transparency in the largest PBMs and the lack of meaningful competition negatively affects patients, pharmacists, insurance plans, manufacturers, and ultimately taxpayers who fund government sponsored healthcare programs.

 

 

What is Pennsylvania Doing About the PBM Problem?

 

Pennsylvania's Auditor General Takes This Issue Seriously!

 

 

Click here to view the Auditor General's press release

 

 

Gag Clause Prohibition

Legislation has been introduced that would prevent PBM's from putting Gag clauses in their contracts -

Gag clauses restrict pharmacists/pharmacies from disclosing information to patients that could reduce their out-of-pocket costs for medications and allow patients to receive the lowest price available on all prescription medications. Representative Judy Ward (R-80) is the sponsor of House Bill 2211.  

 

Fair Reimbursement in Medicaid

Legislation has been introduced that would prevent the PBM's from paying the pharmacies less than the actual cost the pharmacies pay for a drug, while drastically overcharging the State of Pennsylvania's Medicaid program for that same drug.  The question is - where are the taxpayer's dollars.  Representative Doyle Heffley (R-122) is the sponsor of House Bill 2212

 

 

What can you do?

 

Contact your legislators and ask them to support community pharmacies by supporting HB 2211 and HB 2212. 

 

Click here to find your Representative and Senator and their contact information.  

Chose a letter to send to your Representative.  

Chose a letter to send to your Senator

 

 Letter 1 to Representative                                 Letter 2 to Representative

 Letter 1 to Senator                                             Letter 2 to Senator

 

 

 

 

 

 

 

SOURCE: http://www.ncpanet.org/advocacy/pbm-resources

 

PBMs manage pharmacy benefits for over 253 million Americans, according to their trade group. The three largest companies in the PBM industry - Express Scripts, CVS Caremark, and OptumRx - cover more than 180 million lives, or roughly 78% of the market.

 

As of 2016, the two largest PBMs - CVS Health and Express Scripts - rank on the Fortune 500 list with astonishing revenues of $178 billion and $100 billion respectively.

 

SOURCE: http://fortune.com/fortune500/list

 

 

 

Videos on PBMs

 

 

 

 

 

Additional Information and Resources on PBM's

Ohio Auditor of State Issues PBM Report

 

Ohio Fires PBMs

 

Megan Thompson reports on PBMs

 

Whistleblower files lawsuit against CVS Caremark for falsifying drug prices

Danielle Serino

May 31, 2018

 

Why CVS Loves ObamaCare

Wall Street Journal

May 30, 2018

 

Arkansas Healthcare Marketplace Subcommittee Special Meeting on Pharmacy Reimbursements

Arkansas Pharmacists Association

January 31, 2018

 

How CVS uses its market power to destroy competing independent pharmacies

By David Dayen

The American Prospect

January 23, 2018

 

Take the Generic, Patients Are Told. Until They Are Not.

By Charles Ornstein and Katie Thomas

New York Times

August 6, 2017


Watch Congress Vent About PBMs on the House Floor
Drug Channels
March 3, 2017


 

 

 

Association Management Software Powered by YourMembership  ::  Legal