The drugstore lobby group "Pharmacists United for Truth and Transparency" released a paper not too long ago entitled, "Contract Negotiating Tool." PUTT admits it created the paper to "place stories in major news outlets" and recruit "annual membership" donors to its campaign against PBMs.  

Unfortunately, the paper could have serious implications beyond membership recruitment. In writing this paper, PUTT glaringly ignores several important elements and facts in the drug distribution and reimbursement process. And for pharmacy benefit managers, the companies that large employers, unions, insurers and government agencies hire to obtain discounts from drugstores, it is a disservice to the quality work they provide. 

Below are a few basic questions the report fails to address:

• If PBMs don't save money, why do America's smartest health purchasers and programs hire them?  It's unclear if the health purchasers that hire PBMs to reduce drugstore costs will be receptive to a drugstore-lobby "educational" effort. Only large, experienced, sophisticated organizations hire PBMs. PUTT looks silly trying to convince Fortune 500 companies, Medicare, unions and health insurers that PBMs increase prescription drug costs by decreasing payments to drugstores and drugmakers.
• Why does the report ignore mainstream studies that conflict with the drugstore-lobby line? The paper virtually ignores countless government and private sector reports on PBMs, including reports published by the Federal Trade Commission, the Government Accountability Office and a new survey of large employers that finds strong satisfaction with PBMs.
• How could the report's authors not know that PBMs promote generic drugs over brand drugs?  The report implies PBMs promote brands over generics when anyone familiar with the pharmacy benefits marketplace knows the opposite is true. PBMs design formularies with low (or even zero) co-pays for generics and higher co-pays for more expensive brands – this is common knowledge in the health care sector.  Plan sponsors routinely judge PBMs based on their ability to increase the use of generics and decrease the use of competing brands.
• Since when did discounts and rebates become bad for consumers?  PUTT's attack on manufacturer rebates and discounts defies reason. Basic economics shows consumers benefit when businesses use scale to demand discounts from suppliers. The same is true in the prescription drug marketplace and numerous studies confirm it. Payers view rebates and discounts as essential to cost reduction and are specific when they write contracts on how rebates are to be dealt with (by the way drugstores get rebates, too).
• Do the authors know that PBMs already offer payers the choice of "pass through" and "spread" models? Both models are widely used in the marketplace. Different purchasers prefer each model for different reasons. Some payers want PBMs to "pass through" the costs of each individual drug and others simply want low, predictable, locked-in drug costs regardless of a PBMs' input costs.
• Does anyone honestly believe PBMs "set" drug prices?  The report claims PBMs can "set" prices for prescription drugs.  Of course, pharmaceutical manufacturers set the price of their own products. PBMs have nothing to with it. In fact, each of America's more than 70 PBMs negotiate separately with each manufacturer in hopes of getting a better deal than its PBM competitors. As in any industry, each PBM's goal is to have a lower cost structure than its competitors so it can offer more attractive rates and win more business. To say PBMs "set prices" reveals a basic misunderstanding of how markets work and how PBMs, manufacturers and plan sponsors operate in the prescription drug marketplace. 

PUTT has announced plans to publish more anti-PBM reports in the future.  However, savvy employers and other purchasers are wary of "reports" that provide information only helpful to the independent drugstore lobby.