2018 has been a watershed year for the effort to reform our nation’s healthcare system and bring down the cost of prescription drugs. From the administration’s actions to innovation in the states, every level of government is looking to tackle the true drivers of cost throughout the system. One area in particular that has attracted the attention of policy makers are the industry middlemen known as Pharmacy Benefit Mangers (PBM).
A recent story on NPR’s Morning Edition highlighted how PBMs are driving up costs in our healthcare system with little to no accountability.
Ohio is suing to release a report that would show how two PBMs, CVS Health and Optum, overcharged the state by 8.8 percent to fill prescriptions in its Medicaid program.
While 8.8 may not sound like a whole lot, when it comes to prescription drug spending the difference can be staggering. For Ohio, the state estimates that the upcharge cost roughly $224 million.
Some of the examples are egregious:
Ohio paid the PBM $273.50 per unit for the generic version of Gleevec, a drug that treats leukemia and other cancers, while pharmacies reported the wholesale price of the drug was $83.69. In other words, the PBM charged the state more than the three times the price of the drug.
We’ve written about PBM abuses before and how they operate with impunity in the opaque drug supply chain, but Ohio’s case is just the latest example in a long list of actions taken by PBMs that drive up costs and hurt consumers.
Tactics such as “gag clauses,” which PBMs force their contract pharmacies to sign, legally prevent your neighborhood pharmacist from helping you to find a less expensive drug. In many instances, meaning that they can’t tell you when your insurance and PBM have upcharged a drug so much that it would actually be cheaper to buy without using your insurance plan.
PBMs are able to get away with these tactics because patients often have no idea they’re even operating behind the scenes. The lack of transparency allows PBMs to significantly increase the price of your prescription without any repercussions.
Efforts like Ohio’s to shed light on these practices are much needed, but we need more action to ensure that patients and consumers know fully how their drugs are priced why middlemen like PBMs are costing them more.
