For years, pharmacy benefits managers, the third party administrators of prescription drug programs, have insisted that they save employers money by helping them negotiate prescription drug coverage with drug manufacturers. But pharmacists and other consumer advocates have often been skeptical of PBMs' real value.
How can a middle-man who makes huge profits help lower costs for the rest of us?
A new education campaign sponsored by the National Community Pharmacists Association (NCPA) called "Who Runs My Drug Plan?" goes right at that very question. The answer is that PBMs don't lower costs. In fact, they often mark-up the price of medications and keep the profits.
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The new NCPA campaign helps explain in plain language the problems of dealing with PBMs. Like my organization, Pharmacists United for Truth and Transparency, the NCPA is working to help educate benefits managers, employers and consumers about the shadowy world of pharmacy benefits managers.
A great video on the website uses a slick salesman as the embodiment of PBMs. He tells us, "I am the one who's really in charge of your medicine. We pharmacy benefits managers have invented lots of ways to make money on your medicine…I actually mark-up your medications and put the money in my pocket."
One of the largest problems plaguing the PBM industry is the lack of transparency. PBMs often force pharmacists to sign egregious contracts which prohibit the pharmacist from telling employers how much the PBM pays them for medications. That's because PBMs often pay pharmacists far less than they demand from employers.
By keeping pharmacists and employers from talking to each other, the PBMs have room to price-gouge us all. Even under increasing pressure for transparency, many PBM contracts with pharmacies have become more oppressive, not less. Ultimately, that creates an atmosphere which allows the PBMs to increase the cost of medications and raise member fees for employers.
While benefits managers looking for a fair, transparent contract agreement with their PBM are fighting an uphill battle, it's not impossible to negotiate a good contract.
The first step is to request a detailed, itemized explanation of the PBM's fee structure and make sure there are no loopholes for hidden fees. It's also important to review a copy of the PBM's agreement with network pharmacies. If the PBM refuses to do so, there's a good chance they have something to hide.
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