Copay Adjustment Programs: What’s Next for Manufacturers and other notes from around the interweb:

• Copay Adjustment Programs: What’s Next for Manufacturers? The ongoing battle over controversial copay adjustment programs that shift more of the costs of specialty medications onto patients—otherwise known as accumulators and maximizers—continues to draw significant interest from the healthcare community. As payers and manufacturers clash over cost-shifting strategies while state and federal courts increasingly become involved, patients keep getting caught in the middle. Since these programs are designed to ensure that manufacturer copay assistance payments no longer count toward a patient’s deductible or out-of-pocket costs, the stakes are particularly high for manufacturers. With their assistance coupons restricted from counting toward their annual out-of-pocket maximums, patients are far more likely to stop taking their medications because they can no longer afford them.

• Best Pharmacy Benefit Consultants for Cost-Effective Drug Plans. In the complex world of healthcare and pharmaceuticals, managing costs while ensuring the best possible care can be a daunting challenge for businesses of all sizes. Pharmacy Benefit Consultants (PBCs) play a crucial role in navigating this landscape, offering expertise that can lead to significant savings and more effective drug plan management. This article delves into the importance of PBCs, what to look for when selecting a consultant, and how they can transform the cost-effectiveness of drug plans.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

In the evolving landscape of healthcare benefits, corporations find themselves at a crossroads, especially when it comes to covering weight loss medications like Wegovy. A recent development has seen Novo Nordisk, the pharmaceutical giant behind Wegovy, imposing penalties on employers who limit access to these expensive drugs, have led at least two major employers to discontinue their coverage, unveiling a weight loss drug coverage dilemma:

• Increased Healthcare Costs: Employers face rising expenses in providing health benefits, driven by the excessive cost of weight loss medications.
• Access and Affordability for Employees: Restricting or discontinuing coverage affects employees’ access to potentially life-changing treatments, raising questions about healthcare equity.
• Negotiation Dynamics: The power struggle between pharmaceutical companies, PBMs, and employers over drug pricing and discounts reveals the complex negotiations that underpin healthcare benefits.
• Corporate Responsibility and Employee Well-being: Companies must balance their financial constraints with their responsibility to support employees’ health and well-being.
• Broader Healthcare Debate: This situation contributes to the ongoing debate about drug pricing, insurance coverage, and the right to healthcare, highlighting the need for systemic changes in how medications are priced and covered.

The crux of the matter lies in the negotiation dynamics between employers, Pharmacy Benefit Managers (PBMs), and drug manufacturers. PBMs play a crucial role in negotiating drug prices, but their ability to secure discounts is being challenged by the manufacturer’s aggressive tactics. This situation leaves employers grappling with soaring healthcare costs, putting them in a difficult position: either absorb the excessive costs of these medications or face the manufacturer’s financial penalties.

The standoff has major implications for both companies and their health plans, as well as for employees dependent on these medications for their health. Despite a company’s financial resources, deciding whether to cover weight loss drugs remains a complex issue. Additionally, there’s a significant risk of fraud associated with GLP-1 weight loss medications. This concern arises from the potential for these drugs to be overprescribed, misused, or diverted, leading to unnecessary costs for companies without corresponding health benefits for users.

The bar chart (figure 1) could simplify this decision-making process regarding their inclusion in the formulary. I suggest holding off until prices decrease. Meanwhile, consider exploring other options such as diet and exercise. As corporations navigate this tricky terrain, the broader conversation about drug pricing, healthcare benefits, and corporate responsibility continues to evolve. This scenario underscores the complex interplay of financial, ethical, and healthcare considerations that companies must balance in the modern corporate landscape.

A good pharmacy benefits consultant plays a vital role in guiding organizations through the complexities of pharmacy benefits management, aiming to optimize healthcare outcomes while controlling costs. Here are some key attributes and certifications that define a good pharmacy benefits consultant which are key to unlocking the value of pharmacy benefits:

1. Expertise in Pharmacy Benefits Management (PBM): A deep understanding of how PBMs operate, including drug pricing, rebate management, benefit design, formulary, and utilization management, is crucial. This knowledge helps in negotiating contracts and ensuring that clients receive the best possible terms.
2. Analytical Skills: The ability to analyze data effectively is essential. This includes interpreting drug utilization reports, identifying trends in prescription drug spending, and evaluating the financial impact of different pharmacy benefit strategies.
3. Certifications: Relevant professional certifications can enhance a consultant’s credibility and expertise. Certifications such as the Certified Pharmacy Benefits Specialist (CPBS) or Certified Employee Benefit Specialist (CEBS) with a specialization in healthcare and benefits can demonstrate a consultant’s commitment to their profession and expertise in the field.
4. Regulatory Knowledge: A thorough understanding of healthcare regulations, including the Affordable Care Act (ACA), Medicare, and Medicaid, as well as compliance issues related to pharmacy benefits, is important. This ensures that advice and strategies are compliant with current laws and regulations.
5. Communication Skills: Effective communication and negotiation skills are vital. A good consultant must be able to explain complex pharmacy benefits concepts in understandable terms to clients and negotiate effectively with PBMs and drug manufacturers.
6. Ethical Standards: High ethical standards and transparency are essential, particularly in areas such as rebate management and contract negotiations, to build trust with clients.
7. Continuous Learning: The healthcare landscape, especially pharmacy benefits, is constantly changing. A good consultant stays updated with industry trends, new drugs, technologies, and regulatory changes to provide informed advice.
8. Strategic Thinking: The ability to develop innovative and strategic solutions that align with the client’s healthcare goals and financial constraints is critical. This might involve designing custom formularies, implementing cost-saving measures, or leveraging technology to improve pharmacy benefits management.

In summary, a good pharmacy benefits consultant combines industry-specific knowledge and certifications with analytical, strategic, and communication skills, all underpinned by a commitment to ethical practice and continuous learning. These attributes enable them to play a critical role in unlocking the value of pharmacy benefits and delivering value to their clients, helping them to manage their pharmacy benefits effectively and efficiently.

Best Pharmacy Benefit Consultants for Cost-Effective Drug Plans and other notes from around the interweb:

• Best Pharmacy Benefit Consultants for Cost-Effective Drug Plans. In the complex world of healthcare and pharmaceuticals, managing costs while ensuring the best possible care can be a daunting challenge for businesses of all sizes. Pharmacy Benefit Consultants (PBCs) play a crucial role in navigating this landscape, offering expertise that can lead to significant savings and more effective drug plan management. This article delves into the importance of PBCs, what to look for when selecting a consultant, and how they can transform the cost-effectiveness of drug plans.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• Lawsuit alleges J&J health plan fiduciaries mismanaged prescription drug benefits. A lawsuit filed on February 5, 2024, against Johnson and Johnson and its health plan fiduciaries is a good reminder that the fiduciary duties that exist under the Employee Retirement Income Security Act of 1974 (ERISA) do not just apply to qualified retirement plans. They apply to ERISA health and welfare plans, too. There is likely a very strong “rest of the story” to the allegations in this lawsuit and the defendants will no doubt vigorously dispute and defend this case, but the allegations in this new class action complaint give employers and their plan fiduciaries much to think about. Among the allegations in the proposed class action complaint, the plaintiff alleges that someone with a 90-pill prescription for one generic drug could fill that prescription without insurance for between $28.40 – $77.41, and yet, it alleges, the defendant fiduciaries contractually agreed to have the plan pay $10,239.69 for the same 90-pill prescription.

In this legal dispute, employees hit Johnson & Johnson with a major lawsuit. Ann Lewandowski and other plaintiffs are suing Johnson & Johnson for allegedly mismanaging their prescription-drug benefits, resulting in significant financial losses for participants in the company’s ERISA plans. The complaint asserts that Johnson & Johnson and its benefits committee failed in their fiduciary duties by allowing the plans to overpay for prescription drugs, notably generic medications, through arrangements with their Pharmacy Benefits Manager (PBM).

This purported mismanagement led to inflated costs for the plan participants, including higher premiums, deductibles, and out-of-pocket expenses, while potentially costing the plans and their beneficiaries millions of dollars. The case underscores the complex interplay of corporate practices, legal responsibilities, and the financial well-being of employees in the healthcare benefits landscape.

Pharmacy Benefit Managers (PBMs) play a critical role in the healthcare system by acting as intermediaries between employers or health plans and the pharmaceutical world. Their primary functions include negotiating discounts with drug manufacturers, determining the list of covered medications (formulary management), and setting the amount pharmacies are reimbursed for drugs. PBMs aim to reduce prescription drug costs and improve convenience and safety for patients, but their practices and the transparency of their operations have been subjects of debate and scrutiny in the context of overall healthcare affordability and access.

Employers can mitigate the risk of litigation like the Johnson & Johnson case by investing in education around Pharmacy Benefit Managers (PBMs), specifically through Certified Pharmacy Benefit Specialist (CPBS) training. CPBS training equips employers with comprehensive knowledge on how PBMs operate, strategies to ensure that their PBM contracts are cost-effective, and insights into maintaining transparency and accountability in their pharmacy benefits management. By understanding the intricacies of PBM operations and learning to navigate the complex healthcare landscape effectively, employers can safeguard against excessive prescription drug costs and ensure that their benefits plans are managed in the best interest of their employees.

Tyson Foods, Employing 140,000, Parts Ways with Major PBM and other notes from around the interweb:

• Tyson Foods, Employing 140,000, Parts Ways with Major PBM. Tyson Foods will become one of the first Fortune 100 companies to stop using the nation’s traditional large pharmacy benefits managers, as it looks to cut spending on high-cost drugs. Tyson’s decision adds to an upheaval in the industry, as startups promising lower costs and transparency challenge the largest benefit managers and pushed them to change their own business models. Tyson made the decision as it saw pharmacy costs soar. “We were going anywhere between 12% to 14% increases for pharmacy — and on a $200 million spend that’s quite a bit. We found that the specialty (drug) component of our trends … were picking up a lot of the increase year over year,” said Renu Chhabra, Tyson vice president and head of global benefits. When she tried to get answers on what was driving those trends from the company’s old pharmacy benefit manger, or PBM, Chhabra says she couldn’t get the kind of data she wanted.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• Cigna Group to Sell Medicare Businesses to Health Care Service Corporation (HCSC). The Cigna Group today announced that it has entered into a definitive agreement whereby Health Care Service Corporation (HCSC) will acquire The Cigna Group’s Medicare Advantage, Cigna Supplemental Benefits, Medicare Part D and CareAllies businesses, for a total transaction value of approximately $3.7 billion. As part of the transaction, The Cigna Group and HCSC have agreed to enter into a four-year services agreement under which Evernorth Health Services, a subsidiary of The Cigna Group, will continue to provide pharmacy benefit services to the Medicare businesses, effective on closing of the transaction.

The healthcare landscape is constantly evolving, and one notable change that’s garnering attention is the shift of J-code drugs to pharmacy benefits. This shift has wide-ranging implications for patients, healthcare providers, and insurers alike. In this post, we delve into the benefits and challenges of this move, offering a balanced perspective that is essential for stakeholders in the healthcare industry.

Understanding J-Code Drugs

Before we dive into the specifics, let’s clarify what J-code drugs are. These are typically injectable drugs administered in a physician’s office. They are categorized under ‘J-codes’ in the Healthcare Common Procedure Coding System (HCPCS). These drugs have traditionally been covered under medical benefits but are increasingly being moved to pharmacy benefits.

The Shift to Pharmacy Benefits: Benefits and Challenges

Benefits of the Shift

1. Cost Transparency: Pharmacy benefits often come with clearer cost information, making it easier for patients to understand and manage their expenses.
2. Streamlined Administration: This transition can simplify administrative processes, potentially reducing the paperwork and time involved in drug dispensing.
3. Potential for Lower Costs: Through pharmacy benefits, there might be better negotiation leverage for prices, potentially leading to lower costs for patients.
4. Enhanced Medication Management: Pharmacy benefits could offer better support in medication management, ensuring adherence and improving patient outcomes.
5. Broader Access to Discounts and Rebates: Patients might benefit from discounts and rebates that are more readily available through pharmacy benefits.

Challenges of the Shift

1. Access Issues: Patients might face more restrictions, such as limited networks of preferred pharmacies, impacting their access to necessary medications.
2. Complex Approval Processes: The transition might involve more complex prior authorization processes, potentially delaying treatment.
3. Disruption of Care: Switching systems could disrupt existing care plans, causing inconvenience and potential health risks for patients.
4. Insurance Plan Limitations: Some insurance plans might offer less favorable terms for pharmacy benefits, impacting coverage and costs.
5. Challenges in Coordination of Care: Coordinating care between healthcare providers and pharmacies can be complex and time-consuming.

J-code drugs are typically injectable drugs that are administered primarily in a physician’s office. Moving these to the pharmacy benefit could have several implications. Here’s a table that outlines some potential benefits and challenges:

Implications for Stakeholders

For Patients

Patients need to be aware of how this shift could affect their access to medication and overall costs. Understanding the nuances of their insurance plans is more crucial than ever.

For Healthcare Providers

Providers must navigate the new administrative landscapes, ensuring that they can still deliver the best care while dealing with different billing and authorization processes.

For Insurers

Insurers play a critical role in this transition, balancing the need to manage costs while ensuring patient access to necessary treatments.

For Pharmacists

Pharmacists will likely see an increased role in patient care, requiring a deeper understanding of J-code drugs and associated management protocols.

Conclusion

The transition of J-code drugs to pharmacy benefits is a complex process with both benefits and challenges. It’s essential for all stakeholders to stay informed and adapt to these changes to ensure that patient care remains effective and efficient. As the healthcare industry continues to evolve, staying ahead of trends like this will be key to navigating the future of healthcare successfully.

5 ways to improve your PBM procurement process in 2024 and other notes from around the interweb:

• Federal mandates bring big lawsuit worries for health plan administrators. The Consolidated Appropriations Act of 2021, enacted on December 27, 2020, introduces significant new disclosure mandates for health plan providers, heightening the risk of substantial legal challenges. This Act amends the Employee Retirement Income Security Act of 1974, aiming to enhance transparency in employee health benefit plans. The implementation of various components of this law has been gradual, with compliance deadlines for certain sections only recently becoming due. Jennifer S. Berman, a seasoned employee benefits attorney and compliance consultant, emphasizes the surge in fiduciary responsibilities for sponsors of health and welfare plans. Three years into the enactment of the CAA, plan sponsors are diligently working to fulfill these newly imposed duties. This legislation represents more than a mere federal requirement for health plan administrators. It carries the potential for significant class-action lawsuits against plans that fail to comply with the updated legal requirements.

• 5 ways to improve your PBM procurement process in 2024. Many self-funded plan sponsors struggle to manage the cost of pharmacy benefits and rely on non-transparent contract guarantees to hold PBMs accountable. Meanwhile, drug spending continues to compound at an astonishing rate in defiance of the savings promised during the procurement process. As a former pharmacy program director for a plan covering more than 16,000 lives, I can tell you that it is possible to stop the “games” PBMs play, control costs, and ensure that all contractual guarantees are met, especially in scenarios where a PBM won’t guarantee an all-in per member per month (PMPM) cost for the year. Understanding the problem is a part of the solution, but making meaningful changes to the way plan sponsors and brokers evaluate PBMs is where the real opportunity lies.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• New limits on prior authorization hailed as good first step. New federal rules requiring health insurers to streamline requests to cover treatments are being hailed as a good first step toward addressing a problem that’s increasingly aggravated patients and doctors. Health insurers will have to provide coverage decisions on urgent treatment requests within 72 hours for patients in Medicare Advantage, Medicaid or Affordable Care Act plans under federal rules finalized Wednesday. The deadline is seven days for non-urgent requests. Insurers’ requirements for their sign-off on some physician-ordered care is a major tension point with providers and has faced recent scrutiny from Congress. The new protocols, which largely take effect in 2026, may cut the review process in half for some insurers.

The upcoming modifications in the Medication Therapy Management (MTM) program by CMS are expected to significantly expand eligibility, with an estimated increase in eligible Medicare beneficiaries from 4.5 million to 11 million. CMS doubles down on medication therapy management (MTM), with program expansion, as self-funded employers remain indifferent to MTM’s vast benefits.

The new eligibility criteria, taking effect in 2025, will include (1) require Part D sponsors to include all core chronic diseases in their targeting criteria, codify the current 9 core chronic diseases in regulation, and add HIV/AIDS for a total of 10 core chronic diseases, (2) lower the maximum number of covered Part D drugs a sponsor may require from 8 to 5 drugs and require sponsors to include all Part D maintenance drugs and (3) revise the cost threshold methodology based on the average annual cost of 5 generic Part D drugs ($1,004 in 2020). These changes are projected to add approximately $336 million annually to plan costs.

MTM is a key strategy to leverage pharmacy-led initiatives to reduce medical costs. By focusing on identifying and resolving Drug Therapy Problems (DTPs), pharmacists can play a crucial role in conducting comprehensive medication reviews (CMRs), enhancing both health outcomes and cost efficiency. The savings generated can then be reinvested into the MTM program, potentially making it self-sustaining.

The revised MTM guidelines will require Part D plans to include members with up to three chronic conditions, taking at least five Part D drugs, and meeting a lowered annual spending threshold. This will necessitate a more comprehensive approach in CMRs, including real-time consultations through telehealth or in-person visits. To optimize their pharmacy benefit management program, self-funded employers should focus on four main strategies:

1. Technological Integration in Pharmacy Workflows: Utilizing platforms that combine medical and pharmacy claims data can help identify a wider range of DTPs, enabling more effective CMRs and facilitating cost reduction.
2. Infrastructure Scalability: Evaluating current technology and infrastructure for their ability to handle increased demand and provide scalable solutions is crucial.
3. Proactive Member Eligibility Identification: Tools that can predict future eligibility and manage enrollment processes will be essential for efficient MTM service delivery.
4. Continuous Program Monitoring: Implementing tools for real-time monitoring and analysis will help in identifying cost-saving opportunities and ensuring the effectiveness of the MTM program.

Self-funded employers would serve themselves extremely well by taking a page from the CMS playbook. By embracing a data-driven approach and focusing on efficiency and scalability, self-funded employers can adopt a CMS-like medication therapy management (MTM) expansion, achieving total cost of care savings and maintaining high-quality service for members with multiple medications and conditions.

Employer Health Plans Fear State PBM Crackdown Preemption Threat and other notes from around the interweb:

• Employer Health Plans Fear State PBM Crackdown Preemption Threat. Employers looking ahead to a continued push by state and local governments to regulate pharmacy benefit managers more tightly in 2024 are set to back stricter federal law preemption of these measures. PBMs, which manage prescription drug plans of behalf of health insurers, have been criticized over lack of transparency and inflated costs to health plans, but the federal government has not yet enacted legislation to rein in these middlemen. Groups representing companies with self-insured health plans say the states’ attempts to fill the void on PBM legislation threaten preemption protections under the federal Employee Retirement Income Security Act. What’s more, maintaining a nationally uniform regulatory system under ERISA, which turns 50 in 2024, is necessary to avoid a problematic patchwork of state laws, the employer groups say.

• 3 thing to know about specialty pharmacy in 2024. Specialty drugs may be covered by a medical benefit (what patient-members likely think of as “their insurance”) or pharmacy benefits. There’s often a gray area for where specialty falls, but it can relate to whether the drug is being administered in a clinical setting, like a doctor’s office, outpatient clinic, or infusion center. Reimbursement for these drugs can also vary between average wholesale price (AWP) for pharmacy reimbursement and average sales price (ASP) for the medical benefit. It’s complex to compare, and both ASP and AWP are used in the health care industry, but they’re different. ASP is a government-regulated tool that uses manufacturer sales information including discounts, such as rebates. AWP is the average price that wholesalers sell drugs to pharmacies, prescribers, and others. A government report found the median percentage difference between ASP and AWP to be 49%.

• Plan Sponsors Have a Fiduciary Duty to Employees that Includes Scrutiny of PBM-Owned Rebate Aggregators. Drug manufacturer rebates can be a valuable tool for controlling the rising costs of prescription drugs. Most manufacturers offer a rebate program through which they agree to return a part of the drug’s list price to plans in exchange for access to the plans’ drug “formulary”. Rebates are intended to flow through to the plan sponsors and benefit patients, reducing their overall drug spend. The rebate process has been hijacked by PBMs and their sister-aggregators. PBMs utilize rebate aggregators to negotiate drug manufacturer rebates on behalf of the plans they administer. In 2022, just three PBMs along with their rebate aggregators, controlled 79 percent of the market. Some of the largest rebate aggregators include Zinc (owned by CVS Caremark), Ascent (owned by Express Scripts), and Emisar (owned by United Healthcare).

• Why such ‘high markups’? Senators seek drug price probe of insurers who own PBMs. The senators urged Inspector General Christi Grimm to determine if large insurance companies are using their vertically integrated pharmacies to evade federal requirements that limit the percentage of premium dollars spent on profits and administration, known as the Medical Loss Ratio, or MLR. The letter follows an investigation by the Wall Street Journal revealing significant markups of generic drugs at specialty pharmacies owned by CVS Aetna (which operates the Caremark PBM), Cigna (which owns Express Scripts) and UnitedHealthcare, which owns a PBM and specialty pharmacy. The Journal’s analysis found that the three companies charged up to twenty-seven times more than a generic reference pharmacy for a selection of nineteen drugs. For example, a monthly supply of the generic version of Tarcera, a lung cancer drug, costs $73 at the generic reference pharmacy, compared to $4,409 through Cigna.