Richard Adams | Forbes Business Council
Each year, PBMs help millions of patients with chronic conditions and disease management. Without PBMs, the cost of prescription drugs would be driven up, and access to critical prescription drugs for vulnerable populations, as well as employer-provided health insurance, would be limited. Yet, despite the important role they play in helping create healthy outcomes and providing access, there often remains the question – what good are PBMs, really?
PBMs share a unique, symbiotic relationship with clients and pharma companies and can be critical to providing access to affordable, quality healthcare. So, given this, how did PBMs become questioned and often blamed in the rising drug costs dilemma? To turn this perception around, PBMs must first be reminded of the role they play and the current pharmacy environment.
The Position Of PBMs In The Industry
The primary goal of a PBM is to develop and maintain formularies. They do this by contracting with pharmacies and negotiating discounts and rebates with drug manufacturers. As there is currently no regulation over Big Pharma and the prices they set, PBMs are the only check on drug manufacturers’ ability to increase the cost of drugs.
In the U.S., health insurance providers hire PBMs to handle this negotiation as well as manage insurance claims, process and pay prescription drug claims. In some cases, a PBM will even contract with a pharmacy for the distribution of prescription drugs for their customers.
Of the 298 million Americans insured, 266 million are served by PBMs via commercial insurance, Medicare Part D or managed Medicaid. Three PBMs commonly referred to as the “Big Three” — Express Scripts (Cigna), Caremark (CVS Health) and OptumRx (United Health Group) — serve most of the total market. If the Big Three controls the majority of the PBM market, is there room for other players, or are patients stuck with the decisions made by these majority stakeholders?
Free from the massive umbrella of the Big Three, which often uses one-size-fits-all solutions for thousands of customers and millions of patients, other PBMs can change the way customers view pharmacy benefits management and evolve from less of a middleman to a collaborator.
How PBMs Can Change The Popular Perception
Using a dynamic combination of data, technology and science, PBMs can provide solutions. They must also be personal, unique and insightful. This is an approach in health that harkens to a bygone era when pharmacists and doctors did not just have patients in their care but people like moms, dads, teachers and the local grocers. It is this view of patients as people that enables PBMs to move beyond one-size-fits-all solutions.
PBMs should go much deeper than the formulary and program management. They should:
• Provide access to critically needed pharmaceuticals, including alternatives like biosimilars — medical products that are highly similar to another already approved biological — and other affordable solutions that can help enrollees create positive health outcomes.
• Help clients understand what is happening in the market, where science is leading us and enable next-level personalization through approaches like pharmacogenomics, the study of how genes affect a person’s response to drugs.
• Study and assess hot topics like orphan drugs and alternative funding, and help clients understand the legalities around these potential industry-changing movements.
• Keep pharmacy spends down, allowing employers to better support important life-saving medical expenditures, which I have observed run around 83% of program spends.
PBMs should not just be a pharmacy partner or the way patients get their prescriptions. They are critical to providing access to affordable, quality healthcare. Without PBMs, the cost of prescription drugs would be driven up and access to critical prescription drugs for vulnerable populations, as well as employer-provided health insurance, would be limited. It is time for these companies to step up and be sure they are not viewed as simply a middleman but considered a partner, an educator and a health outcomes collaborator.