Most employers have little idea what the pharmacy benefit managers they hire do with the money they exchange for the medications used by their employees, according to a 麻豆女优 survey morning.
In 麻豆女优鈥檚 latest employer health benefits survey, company officials were asked how much of the rebates collected from drugmakers by pharmacy benefit managers, or PBMs, is returned to them. In recent years, the pharmaceutical industry has tried to deflect criticism of high drug prices by saying much of that income is siphoned off by the PBMs, companies that manage patients鈥 drug benefits on behalf of employers and health plans.
PBM leaders say they save companies and patients billions of dollars annually by obtaining rebates from drugmakers that they pass along to employers. Drugmakers, meanwhile, say they raise their list prices so high in order to afford the rebates that PBMs demand in exchange for placing the drugs on formularies that make them available to patients.
Leaders of the three largest PBMs 鈥 CVS Caremark, Optum RX and Express Scripts 鈥 all that 95% to 98% of the rebates they collect from drugmakers flow to employers.
For 麻豆女优鈥檚 survey of 2,142 randomly selected companies, officials from those with 500 or more employees were asked how much of the rebates negotiated by PBMs returned to the company as savings. About 19% said they received most of the rebates, 27% said some, and 16% said little. Thirty-seven percent of the respondents didn鈥檛 know.
While a larger percentage of officials from the largest companies said they got most or some of the rebates, the answers 鈥 and their contrast with the testimony of PBM leaders 鈥 reflect the confusion or ignorance of employers about what their drug benefit managers do, said survey leader Gary Claxton, a senior vice president at 麻豆女优, a health information nonprofit that includes 麻豆女优 Health News.
鈥淚 don鈥檛 think they can ever know all the ways the money moves around because there are so many layers, between the wholesalers and the pharmacies and the manufacturers,鈥 he said.
Critics say big PBMs 鈥 which are parts of conglomerates that include pharmacies, providers, and insurers 鈥 may conceal the size of their rebates by conducting negotiations through corporate-controlled rebate aggregators, or group purchasers, mostly based overseas in tax havens, that siphon off a percentage of the cash before it goes on the PBMs鈥 books.
PBMs also make money by encouraging or requiring patients to use affiliated specialty pharmacies, by skimping on payments to other pharmacies, and by collecting extra cash from drug companies through the federal 340B drug pricing program, which is aimed at lowering drug costs for low-income patients, said Antonio Ciaccia, CEO of 46brooklyn Research.
The 麻豆女优 survey indicates how little employers understand the PBMs and their pricing policies. 鈥淓mployers are generally frustrated by the lack of transparency into all the prices out there,鈥 Claxton said. 鈥淭hey can鈥檛 actually know what鈥檚 true.鈥
Billionaire Mark Cuban started a company to undercut the PBMs by selling pharmaceuticals with transparent pricing policies. He tells Fortune 500 executives he meets, 鈥淵ou鈥檙e getting ripped off, you鈥檙e losing money because it鈥檚 not your core competency to understand how your PBM and health insurance contracts work,鈥 Cuban told 麻豆女优 Health News in an interview Tuesday.
Ciaccia, who has conducted PBM investigations for several states, said employers are not equipped to understand the behavior of the PBMs and often are surprised at how unregulated the PBM business is.
鈥淵ou鈥檇 assume that employers want to pay less, that they would want to pay more attention,鈥 he said. 鈥淏ut what I鈥檝e learned is they are often underequipped, underresourced, and oftentimes not understanding the severity of the lack of oversight and accountability.鈥
Employers may assume the PBMs are acting in their best interest, but they don鈥檛 have a legal obligation to do so.
Prices can be all over the map, even those charged by the same PBM, Ciaccia said. In a Medicaid study he recently conducted, a PBM was billing employers anywhere from $2,000 to $8,000 for a month鈥檚 worth of imatinib, a cancer drug that can be bought as a generic for as little as $30.
PBM contracts often guarantee discounts of certain percentage points for generics and brand-name drugs. But the contracts then contain five pages of exclusions, and 鈥渘o employer will know what they mean,鈥 Ciaccia said. 鈥淭hat person doesn鈥檛 have enough information to have an informed opinion.鈥
The 麻豆女优 survey found that companies鈥 annual premiums for coverage of individual employees had increased from an average of $7,739 in 2021 to $8,951 this year, and $22,221 to $25,572 for families. Among employers鈥 greatest concerns was how to cover increasingly popular weight loss drugs that list at $2,000 a month or more.
Only 18% of respondents said their companies covered drugs such as Wegovy for weight loss. The largest group of employers offering such coverage 鈥 28% 鈥 was those with 5,000 or more employees.
