The Industry-Wide PBM Issues of Today
The pharmacy benefit industry continues to become increasingly complex as time goes on. The driver of PBM issues today is for-profit companies implementing vertical integration tactics that aid in hiding fees to benefit their stakeholders instead of their members.
This complexity is being implemented by design, and there is no regard for the lives of our neighbors or friends. Because of high costs, 37% of U.S. adults skip filling their prescriptions, which results in 125,000 preventable deaths each year.
Traditionally, positive contractual terms hide scam practices, the flow of funds all lead to the same for-profit companies, and employers and their employee members are left to navigate an inhospitable industry with ever-increasing costs.
Following the Money
Traditional PBMs use industry-specific terms that cloud contract agreements. Employers are pulled in by language like “100% rebates” without questioning its validity or ability to be tracked. Nuances and hidden fees will prevent employers and patients from actually seeing discounts or savings on their medications. These traditional PBMs are not interested in providing less expensive medication options because their profit is based on the percentage of the drug costs.
When following the money (if you can navigate the complex industry), you’ll realize that contractual language is saying one thing while employers are experiencing something else entirely—if rebates and discounts are going up, why are overall costs for medications continually increasing?
When asking your PBM about this phenomenon, you’ll likely receive an answer that negates responsibility.
Vertical Integration
Traditional PBMs have surrounded themselves with other companies owned by a singular entity. This means that insurers, PBMs, specialty pharmacies and provider services are all owned by one governing company that incentivizes higher costs and opaque policies. See this chart for a visualization of the complexities.
These PBMs have also made additions to the middle layer with Group Purchasing Organizations (GPOs), adding in even more hidden fees. PBMs granting themselves group purchasing power gives them a better deal on medications without passing those deals to their members.
Going further, many of these companies are located overseas, therefore adhering to different policies. This allows them to hide funds and stay away from U.S. laws and reviews, further shielding employers from the opportunity to understand their contracts.
The pharmaceutical industry has become a complex game to those involved with traditional PBMs, continually proving profits are more important than the lives of those dependent on medications.
The Solution to PBM Issues
There is a simple solution to the overarching PBM issues we’re seeing today: putting Patients over Profits. Implementing a waste-free formulary which allows for the lowest cost, clinically effective medications to reign is paramount to positive health care outcomes.
A waste-free formulary limits most high-cost, low-clinical-value medications. For example, Duexis is a combination of Ibuprofen and Pepcid. The cost for this can be as high as $479 with an online discount card, yet purchasing the two medications separately can be as low as $19—a perfect example of high cost with low clinical value.
When asking a traditional PBM about these examples, their answer will go back to rebates, further prioritizing themselves over members and patients.
AffirmedRx: Putting Patients Over Profits
The AffirmedRx team works toward a waste-free formulary to rid their network of unnecessary medications that provide little value to the patient. Our focus is to lower the statistics of our members skipping medication refills due to cost and help those in need of life-saving prescriptions.
We are working to eliminate many PBM issues, such as the middle layer of GPOs and other vertical integration tactics while also working as a Public Benefit Corporation (PBC). This means we truly can put Patients over Profits, as shareholder profit is ethically (and legally!) not our first priority.
When following the flow of money at AffirmedRx, you’ll find that our employer clients receive benefits in full with no misleading contract language. To work with the AffirmedRx team, contact us today—we aim to empower our members with effective, low-cost care so they can better focus on their business.
