Prescription Drugs - Medicine & Money
The truth about prescription drug costs.
PBMs
- Pharmacy Benefit Manager
- Report PBM Fraud
- What Are They Hiding?
- PBM Record Profits
- 10 Questions to Ask
- PBMs Drive Up Drug Prices
- Lawsuits
[click here]PBMs: What Are They Hiding?
Employers, government and patients are, at best, guessing when it comes to selecting a PBM. PBM contracts are opaque to their clients. The PBM claim of competitive confidentiality actually is an impediment to the competition of free enterprise.
The hidden details include PBM contracts with pharmaceutical manufacturers, selection consultants, and the amount of money they pay their own mail-order pharmacies and independent retail pharmacies for dispensing medications.
Just as real estate agents must work from a standard contract so home buyers and sellers know exactly what they are getting, it makes sense that PBMs should provide the same service to their clients.
PBM clients—the state or business—should have the right to audit whether the PBM is upholding contractual agreements. Today in most states, that right does not exist. But PBMs claim value in regularly auditing pharmacies. It’s one thing if an audit uncover intentional fraud, but it’s carrying things too far when a minor clerical error is extrapolated to cover ALL transactions, with no proof of the extent of any infraction. And the pharmacy has no recourse, no agency or court of appeal.
If PBMs do save money for employers, how much more could an employer save if contract details were fully disclosed. PBMs receive paybacks from pharmaceutical manufacturers to promote their drugs, even when it costs employers more. PBMs cost employers more money by mandating brand names because of contracts with pharmaceutical manufacturers when generics are cheaper.
True transparency, in its most rudimentary form, involves full and open disclosure to the plan sponsor of all sources of the PBM’s revenue, according to Allan Zimmerman, writing in the October 2006 issue of Benefits & Compensation Digest.
Many states are taking on PBMs, demanding openness in their transactions. Maine led the way in 2003 as the first state to pass PBM legislation. Maine’s right to regulate PBMs withstood appeals up to the U.S. Supreme Court that refused to hear another appeal.
The National Legislative Association on Prescription Drug Prices (NLAPD) is a bipartisan organization of state legislators working together across state lines to reduce prescription drug prices and expand access. The legislatures of all of the New England states plus New York, Pennsylvania, Hawaii, West Virginia and the District of Columbia are members, and legislators from Alaska, Arizona, California, Colorado, Pennsylvania, Washington, New Mexico, Oklahoma and Texas also have joined as individual members or participate in the Legislative Working Group on Prescription Drugs and Trade, which is coordinated by the Association.
Requiring these middlemen to report on side deals, kickbacks and drug-switching agreements, states will introduce more competition into the health care marketplace and save money for consumers, according to Sharon Treat, NLAPD director.