The Pharmacy Benefit Brief | February 2022

Welcome to the Pharmacy Benefit Brief. This brief is your monthly snapshot of news from America’s prescription drug supply chain including pharmacy benefit managers, independent pharmacies, and drug manufacturers.


There is a growing trend in states to establish prescription drug affordability boards in an effort to control costs. But there are two important points that legislators must consider before going down this path. 


First, these boards lack the legal authority to set drug prices and even the theory of government price setting is flawed. Ironically, price setting can create financial challenges for everyone in the prescription drug supply and payment chain except the drug manufacturer, the only stakeholder who actually has the ability to set drug prices.


Second, the composition of the affordability boards is important. If these boards want to represent the entirety of the prescription drug supply and payment chain, then all relevant stakeholders, including drug manufacturers, wholesalers, pharmacies, health plans, and pharmacy benefit managers, must be represented. Without all entities involved, the boards cannot accurately evaluate prescription drug pricing, and therefore cannot offer real and workable recommendations.


Many state legislatures are considering a mandate that requires rebates be made available at the point of sale. While policymakers should be considering what can be done to help those patients and consumers who face higher out-of-pocket costs, taking away choice is the wrong way to get there. The fact is, every health plan sponsor is making choices for how to best use the rebate savings delivered by PBM negotiations with drug manufacturers, whether it be to lower premiums for all members of the plan, add more generous benefits, or utilize the savings to lower costs at the pharmacy counter. There are tradeoffs among those choices. The rub with a mandatory point-of-sale, one-size-fits-all policy is that it actually increases drug costs overall.


In fact, this type of mandate was proposed at the federal level for Medicare Part D, and by CMS’ own estimates it would have increased government costs by $196 billion and increased beneficiary premiums by 25%.


To avoid these kinds of negative consequences, it is vital that health plan sponsors maintain the ability to choose what works best for the people they serve. For some, in market segments they choose, offering or requiring point-of-sale rebates could be the best option for a patient population. It should be the health plan sponsor’s decision, not the government’s.  

Latest in Rx News

Take a listen to a recent podcast from the Illinois Life and Health Insurance Counsel discussing the value of PBMs. 

Also, you may be interested in a new episode of The Pharmacy Benefit.

The episode, featuring William Fleming, President, Pharmacy Solutions and Chief Corporate Affairs Officer at Humana, explains what pharmacy DIR means for pharmacists, why it should be thought of as value-based contracting, and how it engages with the pharmacist community to increase medication adherence and keep pharmacies accountable for increasing quality for patients. 


Did you know that every year there is a new theme for the month? This year’s theme is Black Health and Wellness. Read more about the history of Black History Month and its themes here.  

What is a PBM? Watch the short video here.

What is a PBM? Watch the short video here.

America’s pharmacy benefit managers (PBMs). PBMs are advocates for consumers and health plans in the fight to keep prescription drugs accessible and affordable. PBMs administer prescription drug plans for 266 million Americans and have been able to achieve an overall stable cost trend for prescription drugs by innovating consumer-friendly, market-based tools that encourage competition among drug manufacturers and drugstores and incentivize consumers to take the most cost-effective, clinically appropriate medication.