Wednesday, July 17, 2024

How PBMs Are Driving Up Prescription Drug Costs

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When P.B.M.s overcharge, it can increase costs for patients, not just employers and government programs like Medicare.

The country’s most popular Medicare drug plan, SilverScript Choice, covered nearly 3 million Medicare beneficiaries last year. Caremark is its P.B.M., and it overcharges.

Caremark uses Medicare’s money to pay pharmacies, including its own, roughly $2,000 per month for a generic blood cancer drug, imatinib, according to a pricing tool on the SilverScript plan’s website. Because that payment is so high, the out-of-pocket cost for Medicare patients is also high — $664 most months.

That is more than 10 times what imatinib sells for — often less than $50 — at online pharmacies when patients forgo insurance and pay using their own money.

For patients, the situation amounts to “highway robbery,” said Stacie Dusetzina, a drug pricing expert at Vanderbilt University.

The big three P.B.M.s are winning business by promising huge savings. But when clients do the math, many are realizing that the expected savings don’t exist.

Take abiraterone acetate, a generic prostate cancer drug that is available for well under $200 a month from sources like Mr. Cuban’s pharmacy.

Express Scripts has been charging Hyatt nearly $1,500 a month to cover the drug for the hotel company’s employees, according to the P.B.M.’s online pricing tool.

Express Scripts pockets most of the difference between what it charged Hyatt and the wholesale cost of the drug. An Express Scripts spokeswoman, Justine Sessions, said, “An isolated example of an individual medication — among the thousands we cover — does not accurately reflect how much a plan paid for its pharmacy benefits, the savings we help them achieve, and the prescription safety we ensure, or how much members pay for medications.”

Caremark was charging at least one client, Blue Shield of California, $3,000 a month for the same drug. “The fundamental issue was the incentive structure,” said Paul Markovich, Blue Shield’s chief executive. “You can’t fight self-interest.” Blue Shield dropped Caremark as its main P.B.M.



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