After years of saying that PBMs need to do something else to maintain their value proposition, and repeating that concept last week, I realize that I’ve got it all wrong. You see, as this press release from the newly active PCMA (the PBMs trade assoc) shows, they have saved tons of money for Rx customers already. That’s because of the huge competition in the business–funnily enough confirmed just as number 2 and 3 in the business merge–leaving 3 giants and a ton of minnows. Of course, you have to actually read deep into the press release before you discover that PBMs have saved their customers a massive percentage compared to those who have to pay retail cash prices for drugs.
In other words they are saving tons compared to those completely powerless consumers who are getting gouged by the drug companies and aren’t going to Canada. That’s not exactly a tough bar to squeeze under. How about actually reducing drug costs for their members? Impossible? HMOs (love ’em or hate ’em) actually did reduce premiums for their members for a few years in the 1990s. But the PBMs have never come close to getting real price reductions for their clients. The best they can claim is that they’ve successfully designed plans which force people into using few drugs–they’re not using the same drugs at lower prices.
Oh, and by the way the studies claim that unregulated PBMs are better for transparency in the market than presumably, just for instance, PBMs regulated into disclosing what discounts they are getting and passing on to their customers:
"In general, vigorous competition in the marketplace for PBMs is more likely to arrive at an optimal level of transparency than regulation of those terms. Just as competitive forces encourage PBMs to offer their best price and service combination to health plan sponsors to gain access to subscribers, competition should also encourage disclosure of the information health plan sponsors require to decide with which PBM to contract."
Exactly who are they trying to kid? No one knows exactly who’s getting what in share of rebates from PharmaCos to PBMs. Certainly not their employer clients or their members, and generally not their health plan clients. Yet competition among PBMs has been apparently going for at least 15 years. When is this transparency going to happen, then?
Of course when you look at
the source for the majority of this press release it’s the entirely unbiased and unpolitically motivated Justice Department, which happens to be run by this
theocratic fascist fair-minded public servant.