It seems that people are starting to see the dubious business practices of pharmacy benefit managers (PBM). It is only lately that audit PBM services have become popular. It took a while for payers to realize their PBMs may not be acting in their best interests. Now legislators are getting into the game.
Conflict of interest
According to Crystal Clear RX, PBMs keep drug costs low for payers of health benefits such as insurers and HMOs. PBMs do get good deals with drug manufacturers and pharmacies. In addition, PBMs process prescriptions for beneficiaries.
However, most PBMs fail to pass on all the cost savings to the payer. They also favor drug manufacturers that pay them to choose their products. This is on top of the management fee they get from payers. Additionally, many PBMs have their own mail order drug businesses from which patients have to get their prescriptions. This is clearly a conflict of interest.
Pharmacies in a bind
Pharmacies also feel the pinch. PBMs decide on the rates to pay pharmacies for drugs. This is usually lower than the retail price, but pharmacies agree to it because PBMs bring in a lot of money. If a pharmacy does not agree to the terms, the PBM drops them for a more accommodating one. However, the PBM still bills the payer the retail price, and pockets the difference.
Many PBMs are clearly abusing their position, but there are no regulations to stop them from doing so. However, some high-profile cases have recently hit the newsstands. It has brought a lot of attention to PBMs and their pricing practices, and legislators are looking long and hard at putting some laws to prevent PBM abuse.
PBMs can definitely play an important role in cutting down healthcare costs for insurers and HMOs. This will also result in better service and lower premiums for patients, so everyone wins. A regular audit will keep PBMs honest, even when new regulations kick in.