| Pharmacy Benefit Managers Info Series Part Four|
Thanks for following along with our five-part email series on Pharmacy Benefit Managers. Last week we looked at how PBM’s affect your ability to provide healthcare to your patients. Beyond that, PBM’s also impose barriers directly on patients themselves. Let’s see how that happens.
PBM’s have many roles, but their main role is to negotiate and manage the cost of prescription drugs on behalf of the payers, including (supposedly) negotiating lower prices with drug manufacturers. This should in turn make prices lower for patients, but unfortunately this isn’t the case. There’s a term in economics called “the double agent problem,” which illustrates the primary conflict of interest with PBM’s influencing patient drug access. Basically, a PBM benefits more when the prices of drugs are HIGHER, since that facilitates a higher rebate of which they get a cut. In these cases they’re prioritizing their profits over lowering costs for patients. Additionally, their clandestine operations, which they classify as “trade secrets,” lack transparency and make it unnecessarily complicated for patients and even pharmacies to understand the pricing schemes on drugs.
PBM’s have also continually increased administrative costs, partially contributing to higher drug costs, alongside Direct and Indirect Remuneration (DIR) fees, forcing pharmacies to lose money months down the road though clawbacks. Then, they don’t adjust to subtract those amounts from patient drug costs. Throw in the exclusion of drugs from their formularies or requiring prior authorization, and PBM’s have created the perfect gatekeeping storm to LIMIT PATIENT CHOICE, causing difficulty accessing NEEDED drugs and therapies.
This NPR “Planet Money” podcast sheds some more light on how patients are directly affected by PBM interplay.
Fortunately there is some good news about the PBM gauntlet. A lot of people in different parts of the healthcare industry have been paying close attention and figuring out solutions. This includes involving legal and political advocates to work toward reform! Next week we’ll discuss some steps that have already been taken, some currently in process, and other measures we can collectively take to make these much-needed changes in a clearly broken system.