The Employer's Guide Blog for Overseeing PBMs

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CEO thinks more payers will leave traditional PBMs behind [Weekly Roundup]

Why Blue Shield of California’s CEO thinks more payers will leave traditional PBMs behind and other notes from around the interweb:

  • Why Blue Shield of California’s CEO thinks more payers will leave traditional PBMs behind. Blue Shield of California CEO Paul Markovich won’t be surprised if other payers ditch traditional pharmacy benefit managers for a new model. The Oakland-based BCBS affiliate made headlines in August when it said it would not renew its contract with CVS Caremark to manage pharmacy benefits for its 4.8 million members, opting instead for a partnership with Amazon Pharmacy and Mark Cuban’s Cost Plus Drugs as preferred pharmacy providers. Despite the shakeup, CVS will continue to administer Blue Shield’s specialty drug benefits. “We’re going to launch it, we’re going to make it work, and we’re going to push everybody else to probably adopt something similar, because if they don’t, they’re going to have a worse consumer experience and they’re going to have a hard time keeping up unless they adapt,” Mr. Markovich told Becker’s.
  • LA County sues pharmacy benefit firms, alleging they helped fuel opioid crisis. Los Angeles County has become the latest local government to accuse pharmacy benefit managers — the little-known middlemen of the prescription drug industry — of stoking the opioid crisis by helping flood the nation with highly addictive pills. In a lawsuit filed Wednesday in Los Angeles County Superior Court, the county alleged that Express Scripts Inc. and OptumRx Inc. colluded with drug manufacturers to promote dangerously addictive opioids as a safe and moderate pain treatment option. The 59-page filing describes the havoc that the opioid crisis has wreaked inside the county’s emergency rooms, schools and child welfare system: Children are raised by relatives or put in foster care due to parents’ addictions. Overdose patients are increasingly common in the county’s emergency rooms. And at least six students overdosed at the start of the 2022-23 school year, according to the suit.
  • Playbook for Employers – Addressing PBM Misalignment. The guide, released by the National Alliance of Healthcare Purchaser Coalitions, identifies several key strategic recommendations that employers can adopt when looking to better navigate their relationship with PBMs. For one, the playbook recommends that employers find advisers that are genuinely putting in the work for them. Advisers should be independent and transparent, according to the guidebook, and contracts should be designed to ensure that PBMs act in the employer’s best interest. “As we uncover these increasingly apparent anomalies, I think we’ve got to challenge ourselves to do better and most importantly require that our advisers, our middlemen and our intermediaries do better on our behalf,” Mike Thompson, CEO of the alliance, told Fierce Healthcare.
  • STAT News investigation takes deep dive into PBM broker conflicts of interest. Employers across the country — from big names like Boeing and UPS to local school systems — pay consulting firms to handle a straightforward task with their prescription drug coverage: Get the best deals possible, and make sure the industry’s middlemen, known as pharmacy benefit managers, aren’t ripping them off with unfair contracts. But a largely hidden flow of money between major consulting conglomerates and PBMs compromises that relationship, a STAT investigation shows. Some consulting firms often are getting paid more — a lot more — by the PBMs and health insurance carriers that they are supposed to scrutinize than by companies they are supposed to be looking out for.

Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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