By Dan Doebler, President, On-Site Rx
It’s been a tough month to be a leader at a large PBM. July 2024 may go down as the month the tide turned on the spread pricing practices of PBMs. Then again, some of us have been here before (remember when AWP was going away?)
Here is a quick recap for those who don’t scour the press and industry journals for pharmaceutical supply chain stories.
- On July 9th, The Federal Trade Commission (FTC) released an interim report on their 2-year investigation of the PBM industry.
- Within days, the FTC followed up their report by announcing plans to sue the three largest PBMs (CVS Caremark, Cigna’s Express Scripts and United Health’s Optum Rx).
- Last week, the House Committee on Oversight and Accountability invited leaders from CVS Caremark, Evernorth Care Management (Express Scripts) and Optum Rx (United Health) to testify on their business practices. Spoiler alert – they weren’t there to receive kudos for their contributions to patient health and managing cost. The Oversight Committee also issued a report.
If you’re not familiar with prescription benefits and reimbursement structures, you can be forgiven for not understanding the nuances of what these reports mean and why now. Both agencies brought exposure to problems in the supply chain that On-Site Rx identified and has been tackling for large, self-funded employers for the last 15 years.
These reports are good for payers, such as employers, Taft–Hartley plans, Medicare and Medicaid. And they’re good for patients. However, this level of exposure will only help if employers and plan sponsors begin purchasing differently. And here’s where it gets a little nuanced.
Is the fact that PBMs are doing what they are doing news? No. The information battle surrounding transparency in PBMs has been going on for over 25 years. But the exposure and attention from major federal government entities – including those empowered to make changes - is news. What those changes are is only speculation at this point.
On-Site Rx clients are uniquely positioned to receive their prescriptions at our wholesale cost. This elimination of revenue from “middlemen” benefits the plan as well as the patient (member). We will continue to follow these developments. And we’ll gladly welcome any inquiries into how transparent purchasing can benefit plans and patients.
