If the makers of Coke or KFC’s famous fried chicken ever fear for keeping their recipes private and confidential, they should turn to Pharmacy Benefit Managers (PBMs) for the latest and most aggressive methods for preserving secrecy.
PBMs, as CASE has covered extensively, are healthcare middle-men wedged between plan managers, drug manufacturers, patients and pharmacies with the power to negotiate drug prices for patients. CASE has previously highlighted that PBMs—which negotiate directly with drug manufacturers and pharmacies—too often keep their contracts secret, leaving everyone in the dark over their business practices.
Now a new report in Axios reveals just how shrouded in privacy PBMs really are. After Axios obtained a 36 page contract template from Express Scripts—the nation’s largest PBM, and 22nd largest company in the nation—that lifted the curtain on how PBMs negotiate contracts, Express Scripts forced the cloud company hosting the document to take it down.
According to Axios:
- “Express Scripts dismissed the document as out of date and irrelevant.
- But after our story ran, the company’s lawyers forced DocumentCloud to remove the contract template, claiming copyright infringement.”
But what are they so afraid of?
It seems like the media – and now the public – is catching on to the PBM-scheme: They negotiate discounts with drug manufacturers; but instead of passing those savings onto the consumers they’re intended for, they keep those discounts to pad their profits.
What’s clear as day is that PBMs operate in the dark. And when even a crack of light threatens to expose their process – as Axios did this week –they are ready to attack. At least PBMs are consistent. Just as their contracts deny pharmacists the right to inform patients of lower cost drug options, they deny the public the least bit of transparency on their financial dealings. Their business model is to monopolize a niche portion of the pharmaceutical pipeline—just three PBMs control more than 75 percent of the market—and to refuse access to any information that could lead to real accountability or lower prices for consumers.
This is even concerning given that PBMs are now joining forces with insurers, accelerating consolidation within the healthcare industry that reduces what little competition still exists. American consumers must hear LOUD AND CLEAR that reform of PBM’s shady business practices is necessary for drug prices to decrease and level the playing field. It’s time for serious free-market principles to transform the PBM market in a way that reintroduces competition and consumer choice back into the prescription drug supply chain.
