Pharmacy Benefit Managers Under Scrutiny

Evidence shows these fees have ballooned, with PBMs demanding double the amount of fees today than they did five years ago.²

“These large entities with massive financial interests have risen to powerful positions in the U.S.” says Dr. Blumstein. “And, like anyone with power, they will go to great lengths to maintain the status quo, even establishing offshore entities that are peripheral enough not to seem part of the same company—and they are largely out of reach of U.S. regulation. Sometimes it feels like we are essentially playing a game of Whac-A-Mole.”

Spreading Unfair, Obscure Practices

“ATAP is also working to end spread pricing, so that PBMs can no longer reimburse pharmacies less than what they are paid by a health plan for a drug and keep the spread for themselves,” says Dr. Blumstein. New York enacted a law regulating PBMs in 2021, and just recently, the New York State Department of Financial Services proposed new regulations that would more tightly regulate PBMs, including measures to increase transparency to consumers and employers and address spread pricing.

Mr. Cantrell

Indeed, says Joseph Cantrell, ACR director of state affairs and community relations, the cryptic and changing nature of the PBM universe renders things even more difficult. “We are always reacting to new policies and tactics on the part of the PBMs. The entire issue involves an unusual level of complexity that can leave most people confused. It takes an enormous ongoing effort to examine the supply chain and determine exactly where the manipulation is happening in the market. There is virtually no transparency in the system, however, so we don’t know where the real cost centers are—and we don’t know the true cost of the drugs.”

Taking Steps Against Step Therapy

“Now the Federal Trade Commission is looking into PBMs,” says Dr. Worthing. “We have had conversations with the investigators and have relayed how we prescribe what we think is right for a particular patient, [but] the pharmacy tells them it isn’t covered … and that they need to try one from the PBM-crafted preferred drug list. If that fails, then they can get the drug I prescribed. This step therapy draws out the time that an ineffective drug is used, essentially delaying the appropriate care. Again, the patient loses.”

Independent Pharmacies

“Another way that PBMs exert power is by steering patients to pharmacies they own,” says Dr. Blumstein. “Not only that, but they put up roadblocks in front of independent pharmacies in the form of reduced reimbursements and onerous audits. The mom-and-pop pharmacies are left out of this system and, indeed, are the other victims of PBMs.”