Pharmacy Benefit Managers Impact Healthcare Costs
Negotiated rebates are often not passed on to consumers to lower medicine costs
By Jeff Stone, August 26, 2022 9:41 am
As individuals and families in Nevada ponder the state of the current health care system and its profound impact on their lives, they need to negotiate a dizzying flurry of complex terms, abbreviations, acronyms, and definitions. It’s a headache.
So it’s easy to understand how the term PBM could be largely unknown among people not in the healthcare industry, even those who make it a point to study up on healthcare-related issues. But PBMs are an important part of the discussion, and they have a significant impact on healthcare costs.
PBM stands for Pharmacy Benefit Manager. In short, a PBM is a company that manages prescription drug benefits for large companies, Medicare Part D plans, insurers, and other large-scale payers. PBMs are largely responsible for determining which drugs are available to you and at what cost. Three PBMs dominate the market: CVS Caremark, Express Scripts, and OptumRx.
These companies have the power to negotiate huge rebates on prescription medicines, which is how they make their money. However, many of those huge rebates are not passed on to consumers to lower medicine costs for you! This, as you might imagine, does not sit well with the general public. An extensive poll was recently conducted among voters for a patient-advocacy organization called Consumer for Quality Care. One of the proposed policy solutions for high health care costs put forward in the poll was “require health insurers and pharmacy benefit managers to pass the rebates or discounts they receive from drug companies on to patients.” That idea received 73% approval.
Transparency and accountability must be part of an effective, responsive health care system. On that front, we have a lot of work to do in Nevada. By a 3-to-1 margin, Nevadans consider their health care system the worst in the nation; forty percent believe they’ll have to leave the state to get quality care; and fewer than half believe things are moving in the right direction when it comes to health care policy in Nevada.
Unfortunately, no relief from the PBM issue for consumers was included in the recently passed federal bill, the Inflation Reduction Act. Polls show that 72% of voters are concerned that PBM regulation was not part of the bill, and 69% are concerned the bill doesn’t help patients afford their medicine. Clearly, too many of our elected leaders are not giving enough consideration to the concerns and priorities of the voting public when it comes to health care.
I was recently honored to take part in a wide-ranging panel discussion, sponsored by Consumers for Quality Care and hosted by the Latin Chamber of Commerce, during which some of the brightest minds on the topic of health care policy exchanged ideas. One recurring theme was the importance of voters educating themselves on the ins and outs of health care policy and communicating their thoughts and opinions to elected officials at the state and federal level.
The health care system affects all of us. It’s crucial that people, in Nevada especially, take the time to learn how it works. The impact of Pharmacy Benefit Managers is just one area in which voters can become more informed. I urge them to do so.
Jeff Stone, Pharm D, is currently a GOP candidate for Nevada Senate District 20.
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