(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA) today issued the following statement on a new research paper, “The Value of Pharmacy Benefit Management” authored by University of Chicago Professor of Economics Casey Mulligan and published today by the National Bureau of Economic Research. Dr. Mulligan previously served as Chief Economist of the White House Council of Economic Advisers.
In the groundbreaking research paper, Dr. Mulligan unveils a new economic model to estimate the overall value that pharmacy benefit managers, PBMs, services provide to America’s health care system. According to the paper, PBMs are creating value exceeding $145 billion annually.
PBMs provide a vast array of important services in the health care system, including negotiating prescription drug rebates and discounts, managing patient drug utilization, and promoting generic drugs, processing prescription drug claims, administering home delivery of medications, and developing pharmacy networks for health plan sponsors. The multitude of services that PBMs provide is leading to value in the form of health care cost savings for consumers and the government, increased patient drug utilization and adherence, more prescription drug innovation, and better health outcomes.
The paper also shows that PBM services achieve at least $148 billion in overall savings, which is derived from rebates and discounts negotiated by PBMs, combined with lower clinical expenses due to increased drug utilization.
“The first-of-its-kind quantitative model and paper mathematically shows that PBMs are a cost-reducing force in our health care system,” said PCMA President and CEO JC Scott. “It’s time, once and for all, to put to bed false assertions about PBMs and recognize the factual truth: PBMs create value for health care payers and patients, leading to significant cost savings and healthier outcomes for patients.”
In addition, the paper highlights that employers, labor unions, and other health plan sponsors would forego $58 billion of value annually without the involvement of a PBM.
PCMA is the national association representing America’s pharmacy benefit managers (PBMs). PBMs administer prescription drug plans for more than 266 million Americans who have health insurance from a variety of sponsors including: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), state government employee plans, Medicaid plans, and others.