What’s a PBM?

Pharmacy Benefit Managers (PBMs) are “companies that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers” (The Commonwealth Fund, 2019). In the American healthcare system, they’re responsible for handling:

• The automated processing of Rx claims (i.e., they’re the reason the billing of your prescriptions is increasingly convoluted, putting greater logistical burden on patients, providers, and payers)

• Creating the "formulary" of covered drugs for payers (i.e., they’re the reason your medication is covered, your prescription requires a PA, or why you have to take the expensive brand-name version of a medication when a cheaper generic version exists)

• Negotiating rebates with drug manufacturers (i.e., they have a financial incentive to create formularies that include those manufacturer’s drugs)

• Creating pharmacy networks

• Reviewing drug utilization

• Managing mail order specialty pharmacies (i.e., they’re the reason that mail order pharmacies are cumbersome to work with, to the point of significantly negatively impacting patients’ care experience (sometimes even in outright unethical ways))
  

Have you heard of…?

CVS Caremark (owned by CVS Health, which also owns Aetna) | $322.5 billion

Express Scripts (owned by Cigna) | $180.5 billion (Cigna)

Humana | $92.9 billion

MedImpact (affiliated with Blue Cross Blue Shield, HealthPartners) | $1.5 billion*

OptumRx (owned by UnitedHealth Group) | $324.2 billion (UnitedHealth Group)

Prime Therapeutics (affiliated with Blue Cross Blue Shield) | $4.7 billion*

The above listed PBMs are the biggest in the US, with CVS Caremark, Express Scripts, and OptumRx together accounting for about 80% of the entire market. Each company’s annual revenue as officially reported for 2022 (listed to the right of their name) highlights just how exorbitant their profits are relative to the pervasive harm they cause to patients, providers, and payers on a daily basis, including:

• For patients (like you):

  • Increased difficulty filling your prescriptions due to logistical burdens like Prior Authorizations (PAs), inability to connect with insurance companies via phone, etc.

  • Being forced to take expensive brand-name medications when a cheaper generic alternative exists (because the generic isn’t included on your plan’s formulary)

  • Increased difficulty affording your prescriptions

  • Being forced to change pharmacies (e.g., when patients with a particular health plan are forced to move their medications to a mail order pharmacy, which is considered “patient steering” and is outright illegal)

  • Increased difficulty accessing pharmacy care as more and more community-based pharmacies close

• For pharmacy providers (like us):

  • Increased difficulty filling prescriptions due to logistical burdens like PAs, inability to connect with insurance companies via phone, etc.

  • Decreasing ability to accept a diverse array of insurance plans, which makes us less accessible to our patients (especially those who face financial challenges and MUST use insurance in order to afford their prescriptions)

  • Inability to keep our businesses financially viable due to under- (or complete lack thereof) reimbursement for the cost of filling prescriptions

  • Closing our businesses due to employee burnout

• For medical providers (prescribers like Physicians, Physician Assistants (PAs), and Nurse Practitioners (NPs)):

  • Increased difficulty prescribing certain medications due to logistical burdens like PAs, inability to connect with insurance companies via phone, etc.

  • Decreasing ability to accept a diverse array of insurance plans, which makes them less accessible to patients (especially those who face financial challenges and MUST use insurance in order to afford their healthcare)

  • Inability to keep their businesses financially viable due to under-reimbursement for the cost of providing health services

• For payers (state and federal governments, insurance companies, and large employers):

  • Overpaying for pharmacy services rendered (especially in the cases of Medicaid and Medicare funding, which ALL taxpayers contribute to!)

*As reported by a third-party source; unable to locate company’s 2022 official financial report