In the United States, nearly 40% of people struggle to afford their prescription drugs, with one-third saying that they have skipped refilling a prescription one or more times due to the high drug cost.
Moreover, the ongoing COVID-19 pandemic has worsen this problem by causing job and health insurance loss and delaying routine medical care.
Rhode Island policymakers are aware of the skyrocketing prescription drug prices, but they have ignored a key cost driver – Pharmacy Benefit Managers (PBMs), according to Uprise RI, a Rhode Island-based news outlet.
PBMs are a third-party administrator of prescription drug programs for insurers, commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans.
By negotiating with drug manufacturers and pharmacies to control drug spending, PBMs have a significant behind-the-scenes impact in determining total drug costs for insurers, shaping patients’ access to medications, and determining how much pharmacies are paid, according to The Commonwealth Fund.
Most states have been doing a much better job monitoring and controlling PBMs, but Rhode Island failed to follow their lead. PBMs have saved consumers and taxpayers hundreds of millions of dollars on their prescriptions, according to the news outlet.
Who exactly are PBMs?
Began in the 1970s, PBMs are small independent intermediaries between insurers and pharmacies, taking a set fee for processing claims. Today, three companies control 80% of the market and they include CVS Caremark, Express Scripts, and OptumRx.
PBMs help payers create a list of covered drugs for plans, manage drug utilization by enrollees, and reimburse pharmacies for providing the enrollee drugs.
The American Pharmacists Association says, “PBMs are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims.”
To know more about what are PBMs and how they work, read the article titled “Pharmacy Benefit Managers: The Mystery Bureaucrats Managing Your Prescription Drugs,” which is published Wednesday on Uprise RI.
PBMs managed pharmacy benefits for 266 million Americans as of 2016. In 2017, the largest PBMs had higher revenue than the largest pharmaceutical manufacturers, which indicates their increasingly large role in US healthcare.
