Fact: Employers are under no obligation to hire pharmacy benefit companies, but a vast majority of employers work with pharmacy benefit companies.
Recent findings from the PricewaterhouseCoopers (PwC) 2021 “Health and Well-being Touchstone Survey” of 368 companies explains why employers, including small and mid-sized businesses, voluntarily hire pharmacy benefit companies to help them provide affordable, quality prescription drug coverage for their health plan enrollees.
“To help manage overall drug cost trends, over 80% of employers told us that they continue to look to their pharmacy benefits manager (PBM) for solutions, supported by traditional management strategies…” the PwC survey states.
During a recent Senate Health, Education, Labor and Pensions (HELP) Committee hearing, Senator Rand Paul (R-KY) underscored that pharmacy benefit companies are VOLUNTARILY HIRED by employers and the market has plenty of PBM choices, stating:
“So it’s quite confusing we want to blame PBMs for everything but why do people hire them? No one’s forcing anybody to hire them…The bottom line is in a free society, rational thinking, labor unions and businesses and health organizations are choosing a PBM. Why are they choosing a PBM? Do you think they want higher prices? And if a PBM is gouging them, why don’t they go to another PBM? There’s like 70 some odd PBMs and yet we’ve got in our heads somehow, we’re going to forbid this?”
What’s more, a recent survey of employers found that employers are highly satisfied with their pharmacy benefit company. According to the survey, 93 percent of employers using pharmacy benefit companies are satisfied with their services and more than a third are “very satisfied.” The survey also found that 81 percent of respondents say pharmacy benefit companies are effective at reducing drug costs for their organization.
With over 73 full-service pharmacy benefit companies that vary in size, geographic footprint and service offerings, health insurers, employers, labor unions, government programs and other health plan sponsors also have a variety of options to choose the pharmacy benefit company that works best for their unique needs.
During congressional hearings this year a lot has been made of employers’ relationships with pharmacy benefit companies. In this context, it’s important to understand the flexibility employers have in choosing a PBM, as well as the value PBMs are providing by lowering prescription drug costs.
Rather than interfering in the employer pharmacy benefit company relationship, we urge Congress to allow the market to function. Congress should focus on policies that encourage competition – the most effective way to lower prescription drug costs – and address drug companies’ anti-competitive tactics that keep more affordable alternatives from entering the market, which is a root cause of high drug prices.
A new PCMA Rx Research Corner blog quantifies what a world without pharmacy benefit companies would look like for employers. According to University of Chicago economics professor Casey Mulligan, probably 40 percent of the total value pharmacy benefit companies provide would be lost, or a loss of $58 billion in value every year to employers. Read the full Rx Research Corner blog HERE.
Pharmacy benefit companies offer choice and flexibility that allows employers to choose a benefit design that provides affordable, quality prescription drug coverage to their employees. Read more HERE.
See PCMA’s guide to understanding the role and value of pharmacy benefit companies HERE.
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