Pharmacy benefit managers, or PBMs, negotiate deals with drugmakers that set maximum amounts they will reimburse drugstores for generic drugs and what they will then charge their clients for the drugs. The difference between these two numbers is labeled as “spread pricing” and can be very profitable for PBMs, USA Today reports.
Brian Henry, Express Scripts spokesman, told USA Today that Express Scripts’ clients can decide whether or not to include spread pricing in their contracts and that the pricing mechanism earns the PBM money when its clients save money.
However, consumer advocates are questioning how much value PBMs are actually adding to the process. PBMs “essentially are middlemen who also add costs to the system,” Wendell Potter, a consumer advocate and former spokesman for Cigna insurance, told USA Today.
A Department of Health and Human Services rule that went into effect last year requires PBMs to report to the government the rebates and discounts they get from drugmakers when they are processing Medicare benefits, but that information does not have to be shared with the public.
