Episode 27 – 13 Ways PBMs Profit Mightily and Hurt People
Pharmacy benefit managers, or PBMs, are companies that manage prescription drug benefits for payers like insurance companies, government programs such as Medicare and Medicaid, and self-insured employers. They are the middlemen and money handlers who negotiate with pharmaceutical manufacturers to determine drug prices and drug placement on formularies. Considering the costly and far-reaching impact of their negotiations, they have been allowed an inexplicable level of unchallenged secrecy in all of their transactions. Their work determines the total cost the payer will spend on prescription medications, the patients’ access to medications, and how much pharmacies are paid. While their role, ostensibly, is to help control waste and rein in spending on pharmaceuticals, it doesn’t appear those goals made it onto most PBM to-do lists. Abject lack of oversight in a for-profit environment has turbocharged the opportunism among PBMs. The three largest PBMs control over 75% of the business, all three are ensconced in the Fortune 50, and all three are facing racketeering charges. There are a slew of investigations and state and federal legislation focused on curtailing predatory behavior by PBMs.
In this episode, I’m tapping the expertise of Dr. Barbara McAneny, an oncologist, CEO and founding partner of the New Mexico Cancer Center, and former AMA president. Dr. McAneny helps me walk through the myriad ways PBMs increase their own profits while causing harm to patients, pharmacists, and doctors.
In this podcast, you will find 13 problems with PBMs including these five moneymaking machinations:
- Discount and Rebate Strategies—that INCREASE drug prices
- Spread Pricing – a kissing cousin of skimming
- Administrative Fees—until the cows come home
- Mail Order Waste—a money-making scheme
- Direct and Indirect Remuneration—surprise billing PBM-style
Meet Barbara L. McAneny, MD:
Dr. Barbara McAneny is nationally recognized as an advocate, an innovator, a business leader, and a doctor’s doctor. She is a board-certified medical oncologist and hematologist from Albuquerque, New Mexico where she is the CEO and co-founder of the multi-specialty, multi-site New Mexico Cancer Center. She also founded the New Mexico Cancer Center Foundation, which provides grants to help patients with nonmedical expenses.
In 2012 she received a $19.8 million grant to create an oncology medical home, demonstrating that triage pathways would improve outcomes and also lower costs. The Come Home medical home has been recognized and adopted as a recommended model by CMS. Her leadership roles reach well-beyond New Mexico, including nearly two decades with the American Medical Association leading up to her role as the president of the AMA in 2018.
Barbara’s Website: https://www.barbaramcaneny.com/
Examples of small, non-predatory pharmacy benefit managers:
-Navitus Health Solutions
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