As Washington welcomes a new Congress, it’s a good time to revisit the critical, cost-saving role pharmacy benefit managers (PBMs) play in the prescription drug supply chain as well as caution policymakers against policies that intrude into the commercial market.
PBMs work for employers and health plans to secure savings on prescription drugs, enable better health outcomes for patients, and support access to quality prescription drug coverage for more than 275 million patients. PBMs help employers and patients save, on average $1,040 per person per year, providing $145 billion in overall value to the health care system annually.
The vast majority of employers voluntarily choose to hire PBMs to help drive down health care costs. A recent survey of nearly 700 employers across the country conducted by NORC at the University of Chicago found that employers are overwhelmingly satisfied with PBMs’ transparency, flexibility, and savings.
Specifically, employers expressed high satisfaction with PBMs across key performance areas:
- Contract Clarity: 90 percent of respondents expressed satisfaction with their PBMs’ clarity and transparency of contract terms.
- Cost-Effectiveness: 88 percent of respondents expressed satisfaction with their PBMs’ ability to provide the lowest costs for employees at the pharmacy counter.
- Negotiation and Savings: 86 percent of respondents expressed satisfaction with their PBMs’ ability to negotiate discounts from drug manufacturers and generate savings for their organization.
As PBMs work for employers to drive down prescription drug costs, drug companies remain hyper-focused on pushing Congress for legislation that would weaken PBMs’ ability to negotiate greater savings – specifically in the private market.
These disastrous policies all have the same things in common:
- Boost Big Pharma’s profits at the expense of higher health care costs for employers and American families.
- Undermine pay-for-performance in health care and flexibility and choice for employers to design pharmacy benefits.
- Would do nothing to lower patient out-of-pocket costs for prescription drugs or address challenges in the retail pharmacy market.
Big Pharma’s policies targeting rebates and pay-for-performance were analyzed by the former chief economist for the U.S. House Committee on Ways and Means, who found they would increase health care premiums by more than $26 billion annually in the commercial health insurance market and hike drug company profits by nearly $22 billion.
Big Pharma already makes profits disproportionate to others in the prescription drug supply chain. A recent The Wall Street Journal column stated:
“PBMs’ profit margins are relatively slim compared with those of pharmaceutical companies, which continue to capture the lion’s share of drug profits.”
Congress should reject Big Pharma’s self-serving agenda, let the private market work, and focus on encouraging greater competition to further drive down drug costs.
Learn more about how PBMs work 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.
