The Employer's Guide Blog for Overseeing PBMs

The Definition of Oversee: to watch over and direct (an undertaking, a group of workers, etc.) in order to ensure a satisfactory outcome or performance.

Health care deals could make you healthier but may not save you money

Susan Hayes, founder of Pharmacy Outcomes Specialists, which audits PBM contracts for employers and unions, says the recent deals are just the first of many, and she’s worried about the effects. “More mergers of insurance companies, chain pharmacies and (health care) providers means less transparency and higher costs — bottom line,” she says.

PBMs are billed as a way to lower drug costs for employers and consumers, but they’ve increasingly come under fire in recent years as drug prices have soared. PBMs’ slice of the costs and role as a middleman is little understood.

Learn More

Critics of PBMs say the companies sometimes agree to favor high-cost drugs on the lists of medicines your insurer agrees to pay for and that they agree they won’t place quantity limits — or prior authorization programs — on the drugs. That’s despite the fact doing so could help health plans save money and make medical sense.

Tyrone’s commentary:

If integrating the medical and pharmacy benefit requires that you relinquish flexibility and cost controls, the disadvantages of integration far outweigh the advantages. Disadvantages may include:

  • Plan members may pay U&C (usual and customary) prices, which are higher than discounted prices
  • Formulary and rebate arrangements may not be available or are significantly limited
  • Plan sponsors lack authority and flexibility and are typically unable to adjudicate plan limitations, plan exclusions, enforce generic dispensing mandates or validate appropriate drug pricing

There’s already a lack of transparency when it comes to drug prices and employers may have even less information if the insurer and the pharmacy benefit manager are the same entity. It’s going to be harder to get behind the curtain.

[Read More]

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.

Leave a Reply