Exposing the Dark Side of Traditional PBMs and the Need for Patient-Centric PBM Reform

Pharmacy Benefit Managers (PBMs) have become a critical part of the pharmaceutical landscape in the United States, acting as intermediaries between insurers, pharmacies, and drug manufacturers. However, their increasing influence and lack of regulation have raised concerns about greed and transparency, leaving patients to navigate a confusing and often frustrating medication landscape. As we delve into the world of PBMs, it’s essential to highlight the need for PBM reform, the challenges patients encounter when filling their prescriptions and why AffirmedRx is committed to providing a better model for patients.

What are PBMs?

PBMs were originally designed to streamline the drug dispensing process and help manage prescription drug benefits. They negotiate prices with drug manufacturers, establish formularies (lists of covered medications), and oversee the pharmacy claims process. In theory, these functions should help lower costs and improve access to necessary medications. However, the reality is far more complex.

The Greed Factor

Over the years, PBMs have been criticized for prioritizing profit over patient care. Their profit model often revolves around three key areas:

1. Rebates from Manufacturers: PBMs negotiate discounts from drug manufacturers, known as rebates, which they often retain rather than pass on to consumers. This creates a system where the lowest-priced medications may not be prioritized, leading to higher out-of-pocket costs for patients.
2. Spread Pricing: In this practice, PBMs charge insurers a higher price for a medication than what they reimburse pharmacies. The difference, or “spread,” is kept as profit. This lack of transparency can lead to patients facing unexpectedly high costs at the pharmacy counter.
3. Formulary Manipulation: PBMs have the power to decide which drugs are covered and at what tier, which directly impacts patient access to medications. Sometimes, less expensive generics are excluded in favor of higher-cost brand-name drugs that yield larger rebates for the PBM.  

Challenges for Patients

The greed displayed by PBMs translates into real challenges for patients when it comes to filling their prescriptions. 

Here are some of the key hurdles they face:

1. High Out-of-Pocket Costs

Patients often find themselves paying significantly more for medications than expected. When a drug is placed on a higher formulary tier, patients may be responsible for a larger portion of the cost. This can be especially burdensome for those with chronic conditions requiring ongoing medication.

2. Confusion Over Coverage

The complexity of PBM contracts and formularies can leave patients bewildered. A medication that was covered last month might suddenly become unavailable or subject to higher co-pays, leading to a frustrating pharmacy experience and resulting in patients’ inability to afford their medications. Many patients are unaware that their PBM plays a significant role in these changes.

3. Delayed Access to Medications

In some cases, patients may experience delays in obtaining necessary medications due to prior authorization requirements. PBMs often require additional documentation or approval from physicians before covering certain drugs, which can lead to critical delays in treatment.  

The practice of white bagging is another tactic used by PBMs that can delay patient access to medication and increase prices.  This is a process that requires certain medications to go through specialty pharmacies where the PBMs have agreements in place that allow for higher pricing, which ultimately gets passed on to the patient.

4. Limited Choices

With formulary restrictions, patients may find that their preferred medication is not covered or the actual medication prescribed by their physician is not covered, pushing them towards alternatives that may be less effective or have undesirable side effects.  This lack of choice undermines the doctor-patient relationship and can impact treatment outcomes.

The Call for PBM Reform

Given the challenges patients face, many advocates are calling for comprehensive PBM reform. 

 1. Increased Transparency

One of the most pressing needs is for greater transparency in PBM practices. Patients deserve to know how much their medications cost, what factors influence pricing, and how rebates are allocated. Transparency can empower patients to make informed decisions about their health care.

2. Regulation of Rebates and Spread Pricing

Regulating the way PBMs negotiate and handle rebates could help ensure that savings are passed on to consumers. Eliminating spread pricing could create a more straightforward pricing model that benefits patients rather than PBMs.

3. Streamlining Prior Authorization Processes

Simplifying and expediting prior authorization processes can help ensure that patients receive their medications promptly. Reducing administrative burdens on both healthcare providers and patients will lead to better health outcomes.

4. AffirmedRx Patient Care Advocates

AffirmedRx is on a mission to improve healthcare outcomes by bringing clarity, integrity and trust in an effort to reform PBMs.  We are committed to making pharmacy benefits easy to understand, straightforward to access and always in the best interest of employers and the lives they impact. We empower individuals and organizations, guiding them through the intricacies of pharmacy benefits with confidence, clarity and unwavering support.

AffirmedRx’s Patient Navigation team functions as the Patient Care Advocate between provider and pharmacy-minimizing disruptions, relieving common frustration and eliminating back-and-forth communication for patients.  Our Patient Navigation team understands the pharmacy ecosystem and leverages that to be a voice for the patient and advocate for their rights. Always.

Conclusion

The role of PBMs in the healthcare system is crucial but fraught with challenges stemming from greed and a lack of transparency. As patients continue to face high costs, confusing formularies, and delayed access to necessary medications, the call for PBM reform becomes increasingly urgent. AffirmedRx is dedicated to being a solution for the much-needed PBM reform and promises to abide by the utmost ethical standards in our business operations.  By advocating for changes that prioritize patient welfare, we can work toward a healthcare system that truly serves its most important stakeholder: the patient.