President Trump signed Executive order In order to reduce the cost of prescription last month, we aimed at the significant impact of the Pharmacy Benefit Managers (PBMS). Few Americans know what PBM is.
In short, PBM has a big impact on the logistics and cash flow of the prescription industry, setting the price of the patient and controlling the approach to the drug. But what accurately Do they do it?
Federal In the 1950s, the first mandatory prescription for certain medicines. As a result, health insurance companies have added prescription drugs to their policies. PBM has happened to help insurance companies implement these new benefits.
Today PBMS manages all components of the health plan. ‘(Payers’) prescription drugs. “Big Three” -Cvs Caremark, Optumrx and Express Scripts- 60 % control US market management 80 % It almost serves all prescriptions 300 million gringo.
To understand the operation of PBMS, we can track the flow of prescription drugs and funds in the supply chain.
The flow of the drug is relatively simple. Wholesalers buy drugs from manufacturers, sell drugs to pharmacies and distribute them to patients.
The flow of funds is much more complicated. The manufacturer negotiates with PBMS while selling drugs to wholesalers to include drugs in the pharmacy benefits of health plans. PBMS security Rebate Or discounts on drug manufacturers in return for preferring a health plan formPreferred drug list. The more you prefer the arrangement for the formula (e.g. low cost sharing), the more likely the patient is to be selected by the patient or by the patient than the other options, which gains greater use and greater benefits. In return for this process management, the health plan pays PBM.
Finally, PBM repays the pharmacy that distributes the drug to the patient, and the PBM claims a health plan for prescription costs.
However, there are two concerns in this process: vertical integration and spread prices.
Vertical integration It occurs when PBM’s parent company owns several parts of drug supply chains such as insurance companies, PBM itself, and pharmacy. Manufacturing drug Overseas.
Take CVS healthfor example. CVS Health owns AETNA (Health Insurer), Caremark (PBM) and CVS Pharmacy (Special and Postal Pharmacy). Therefore, CVS Health integrated the entire operation vertically.
This vertical integration contributes to the “Big Three” PBM with less competition and more power to control the patient to his pharmacy and insurance company.
actually, Federal Trade Commission (FTC) I found that “Big 3” repaid a non -contract pharmacy at a lower rate than his pharmacy. They also raised their drugs to hundreds and thousands of percent at their pharmacy, generating more than $ 7 billion in sales from 2017 to 2022.
Spread price is another challenge.
Spread price PBMS claims a certain amount of drugs for health plans, but it is a practice that pays less pharmacy to the pharmacy for the same drug. The difference is a spread and is often maintained by PBM (part or full).
Spread price means that PBM repaid Independent pharmacy Such a pharmacy is less than paying the wholesaler’s drugs, causing losses. Over 25,000 independent pharmacies in the United States closed Due to these losses, between 2010 and 2020. According to A 2024 FTC ReportThe top three PBMs generated about $ 1.5 billion in spreads from 51 special drugs from 2017 to 2022.
Ultimately, vertical integration and spread prices in patients have a higher access and choice of pharmacy for patients. Self -burden cost And insurance premiums.
In response to these concerns, state and federal governments are increasing the number of regulators for PBM.
There are all 50 states Passed the bill Adjust the PBMS. Some laws focus on the protection of small pharmacies by repaying the non -account pharmacy at the same rate as the PBM series. Others need to limit the share of patient costs or to license to the PBM. In 27 states, PBM must comply with reports and transparency requirements.
One week went further. Arkan Now, PBM is forbidden to operate its own retail pharmacy in the state, interfering with vertical integration.
Fuel, 7 PBMs, Idang Papatian, by Camilli bill This parliamentary cycle has been introduced. They focus on prohibiting spread prices, increasing transparency and reporting requirements, and changing the way pharmaceutical manufacturers and PBMS negotiate. Some bills also define penalties for PBMs that are not played by the rules and grant more permissions to the federal government.
The influence of PBMS in prescription drugs has increased in recent decades. As a result, the state and federal governments proposed or enacted a law to regulate patients’ PBMS and prescription costs. It is not yet determined whether the legislative approach actually regulates the PBM by actually lowering the cost of the patient.
The study of this article was supported by Arnold Ventures.
