The vast majority of employers and public health programs voluntarily work with pharmacy benefit companies to manage pharmacy benefits. So, what happens when a health plan doesn’t use a pharmacy benefit company? A recent Department of Labor (DOL) Office of the Inspector General (OIG) report provides insight into this question. In fact, the report found that the DOL overspent $321.3 million in a six-year span (2015-2020) on prescription drugs for its Federal Employees’ Compensation Program (FECA) because the Office of Workers’ Compensation Programs (OWCP) did not use a PBM.

This year, Congress is exploring how pharmacy benefit companies impact prescription drug costs and pharmacy benefits. As Congress works to learn more about the important role of pharmacy benefit companies, drug companies are flooding the market with misleading advertising that aims to distract from their high drug prices and egregious patent abuse practices.

Amid the current noise in Washington, it’s important to understand the facts about pharmacy benefit companies and the value they provide to patients, employers, and unions – and the DOL IOG helps to shed light on just that.

According to a RealClearInvestigations article on the DOL OIG report: “The Department of Labor manages the FECA program, which administers workers compensation benefits to 2.6 million federal workers when they get hurt on the job. Part of that includes paying for prescription drugs. Independent auditors found that the FECA program didn’t pay the best price for drugs, therefore not effectively managing pharmaceutical spending, leading to $321.3 million in excess spending on drugs…The DOL didn’t use a pharmacy benefit manager, which negotiates prices to get a better deal on expensive drugs for healthcare systems, the report found.”

PCMA similarly addressed this question in a recently released blog, “A World Without PBMs: A Lesson from Economics.” The PCMA Rx Research Corner blog underscores the critical role of pharmacy benefit companies, and how without their services, employers, labor unions, and other businesses, would lose billions of dollars in value annually:

“…What would happen to the creation, promotion, and management of all of these services if pharmacy benefit companies no longer provided them? The answer would not be that the services all go away — surely their importance is too great for that. Rather, employers, unions, and other organizations would have to bring those services in-house, which would be exceptionally inefficient. Given the inefficiencies resulting from hundreds of thousands or even millions of organizations needing to provide these services for themselves, including negotiating for lower drug costs at a vastly reduced scale compared to one of 73 PBMs negotiating on their behalf, probably 40 percent of the total value would be lost, or a loss of $58 billion in value every year.”

View the infographic on what a world without pharmacy benefit companies would look like HERE.

The takeaway is clear – a world without PBMs would leave America’s employers and patients paying much more for prescription drug coverage and without the expertise that pharmacy benefit companies bring to managing pharmacy benefits. Congress should protect savings and choices for patients and employers by rejecting Big Pharma’s scheme to restrict the one check on their pricing power and weaken pharmacy benefits for everyone.

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Learn more about the critical role of pharmacy benefit companies and how Big Pharma’s egregious practices are the root cause of high drug prices HERE.

See PCMA’s guide to understanding the role and value of pharmacy benefit companies HERE.  

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PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients. Learn more at www.pcmanet.org