The New York Times has published a detailed investigation into how middlemen pharmacy benefit managers (PBMs) drive up drug costs for millions of people, employers and the government.
Though PBMs claim to save money for patients and their clients, the Times reports, “those savings appear to be largely a mirage” allowing PBMs to boost their profits while taking credit for reducing prices. PBMs line their pockets by:
Controlling the market – only three PBMs (CVS Health, Cigna, and UnitedHealth Group) control prescriptions for more than 200 million Americans.
Steering patients to pricier drugs, marking up inexpensive medicines, and tacking on extra billions of dollars in hidden fees to.
Creating offshoot companies to collect additional fees and upcharges on every patient need.
The Times interviewed more than 300 current and former PBM employees, patients, physicians, pharmacists, and other industry experts. The reporters reviewed court documents and patient records to produce the first article in a series revealing the many ways PBMs prioritize their financial interests at the expense of patients, employers, and taxpayers. Here is what they found so far:
PBMs restrict access to medicines. PBMs delay or prevent patients from receiving prescriptions if the medicines don’t maximize the PBM’s earnings. The Times reported examples of patients suffering serious health consequences, including not allowing patients to receive ample supplies of their medicines if they fill prescriptions outside of the PBM-owned pharmacies.
PBMs hurt local pharmacies. PBMs are responsible for reimbursing pharmacies on behalf of employers and the government – the main providers of private health plans and Medicare – but in most cases, PBMs do not reimburse independent drugstores enough to cover costs and stay in business. PBMs instead try to funnel all business through their parent companies’ pharmacies to double down their control on profits.
PBMs burden taxpayers: The Times reported many examples of the ways PBMs hurt even Americans who don’t take prescriptions, who end up paying higher insurance premiums and taxes because of PBM-inflated drug costs.
The Times concluded: “Many patients learn about the existence of PBMs only when they have a problem getting medications and spend hours navigating a byzantine system of approvals and restrictions.”
Congress must step in with meaningful reforms to stop PBMs from further ripping off millions of patients, employers and the government.
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