.png){kind=logo}
PBMs 101:
Understanding the healthcare conglomerates that are using the system to put profits first
Read below to learn about why & how we're fighting them for a more equitable, effective & accessible healthcare system.
Who are PBMs?
Pharmacy benefit managers (PBMs) are middlemen in the pharmaceutical supply chain that increase costs for pharmacies & patients, delay necessary treatments, & make healthcare less accessible.
PBMs first emerged as a means to streamline the management of prescription drug benefits for health insurance plans. However, their extortion of the market and complete lack of transparency have led to real harm for patients, healthcare providers, and those who help pay for patients' healthcare (e.g., employers, Medicare, and Minnesota's Medicaid program). Their conduct has also led to the most expensive prescription drug market in the developed world—one in which Americans are rationing their prescriptions, taking on debt to afford treatments, or completely forgoing taking their lifesaving medication because it's simply unaffordable.
"PBM abuse" is an umbrella that refers to the several abusive practices of PBMs, including but not limited to:
-
Inappropriately low or no reimbursement to pharmacies for services provided
-
Retroactive collection ofxq DIR fees on Medicare claims ("clawbacks")
-
Forcing pharmacies into abusive, non-negotiable
-
"Steering" patients to pharmacies they own and operate
-
Making patients take expensive brand name drugs when cheaper generic alternatives exist
What is "PBM abuse?"
PBMs claim that they "keep prices down and Americans healthy."
Nothing could be further from the truth.
The biggest PBMs are Fortune 15 companies owned by even bigger corporations, leading them to have some of the biggest wells of social and financial capital of any companies in the world. Their vertical integration with healthcare conglomerates and anti-competitive practices are THE primary driver of independent pharmacy closures across the United States.
A Minnesota pharmacy owner and member of our trade association—the Minnesota Independent Pharmacists Association—explains how PBMs have literally made dispensing prescriptions bad for business.
What independent pharmacy owners are saying
"The biggest challenge for us, as I am sure you already know, is reimbursement. Reimbursement rates are terrible, making it vital for pharmacies to try to provide additional services to combat this loss with our already limited time trying to serve our patients.
With Minnesota state insurances [...] deciding to hire a PBM (like Prime Therapeutics who subcontracts with Express Scripts) to manage the processing of claims, there are no funds left to go to the pharmacy. This makes almost every claim either a loss or breakeven, which is not sustainable.
This, of course, is just something that the state should be aware of, but the bigger issue is PBM reform to hold them accountable for paying pharmacies appropriately for claims and not steer patients to thee pharmacy of their choosing for example Walgreens or CVS so they control cost."
FUNDING
MNIndys is a nonprofit organization.
Our efforts are entirely funded by MNIndys members and donors.