Because we are pharmacists, it is all too easy to paint PBMs as the bad guy because by definition, we are enemies! PBMs want to cut our reimbursement so they can make more profit for themselves, and pharmacists want more reimbursement and profit.
But actually, there is one more party to consider--the plan sponsors or employers who are paying for our healthcare, and thus hold the real power. PBMs exist like a middleman or 'broker' because the employers do not want to spend the time or money shopping around for the best deals on all of their employees' scripts. So the PBMs sold this package to the employers:
- The PBM will reduce drug spend on employees by instituting cost effective drug formularies. Otherwise doctors will prescribe for anything that the last hot drug rep promoted to them, which is a hugely expensive brand name drug with minimal, if any, benefits over cheaper drugs.
- The PBM will go out and do the work of contracting with pharmacy providers to ensure wide access for the employees, and lower drug spend for the employers. For example, a large company, say Bank of America, is not going to want to go out and contract with every independent pharmacy like Doctor M's. Nor will they let their employees choose any pharmacy they want, or let Doctor M charge any price he wants, because the employer is picking up the tab, so they want controls and cost reduction. So the PBM contracts the pharmacy pharmacy network and drives reimbursement rates down by having the pharmacies compete against each other for customers. In fact, the PBMs and chains also have their own mail-order pharmacies, which can survive on ridiculously low reimbursement rates, so you are also competing with them.
- In return, the PBM will receive spread pricing. Also note that PBMs compete against each other so they can't set their spread margin too high, or the package they are selling to employers will be more expensive than other PBMs and they won't win the contract.
So in summary, don't forget the almightly power money has to do with this debate. And if you take that "he who has the gold, makes the rules" and follow the chain, it goes employers -> PBMs -> pharmacies, so unfortunately we are at the bottom of the totem pole
