Stop PBMs From Cutting Out Our Local Pharmacies

Pharmacy Benefit Managers (PBMs) are an administrative arm of - or in some cases, a 3rd party services provider - for insurance companies. Their purpose is to negotiate rebates on prescription medications with drug makers, determine formulary placement for the health insurance plans they represent, set reimbursement rates for pharmacies and physicians, and enforce patient requirements of their own making -- for example, prior authorizations and/or "preferred" medication options. PBMs do not hold medical degrees and are not providers of healthcare, despite the prescription drug decisions they make that directly affect patients.

Independent Community Pharmacies are locally owned and operated by small business owners. Their first priority is to their patients. Most community pharmacies offer local prescription delivery, vaccinations, patient counseling - everything that national chains claim to offer - but with a community pharmacy, the money a patient spends on prescriptions stays in the community. Independent community pharmacies also usually have lower cash prices on prescriptions than their giant chain counterparts, and because they are local residents themselves, they many times have personal relationships with the area doctors and hospitals so communication between all parties on behalf of patients is a common occurrence.. Patients filling their prescription at a community pharmacy can rest assured that they are a valued person who is being cared for - not a number without a name. National chain pharmacies (think CVS, Walgreens, Rite Aid) are owned and operated by billion-dollar conglomerates that in many cases also own or have ties to health insurance companies and their PBMs. Since their parent companies are publicly-held corporations, their first priority is to their shareholders - not to patients.

A formulary is the list of prescription drugs that a health insurance company has agreed to cover on behalf of their plan members. PBMs determine these "approved drug lists" for each healthcare plan they represent and update or change them on a regular basis - sometimes random - basis.

Almost all PBMs own - or are affiliated with - mail-order specialty pharmacies. A few of America's largest PBMs also own brick and mortar pharmacies. PBMs attempt to force or "steer" patients to their own pharmacies in an effort to keep all the money 'in-the-family' (so to speak). ​Imagine you have a membership at a national grocery store that offers delivery. You want to purchase your favorite cereal from the local grocer that's 1 block from your house and offers a better price, but the national store your membership is at will penalize you & raise prices on what you buy if you purchase your cereal from the local grocer. So you're forced to pay a higher price and wait on delivery of your cereal.   Not exactly ethical, right? That's the same as "patient steering" or forced mail-order.

Investigations in multiple states have uncovered serious questions about the level of profiteering PBMs that manage Medicaid are engaged in. As with private health plans, PBMs provide prescription drug benefit plans to Medicaid and Medicare enrollees and bill the government for their services. State governments pay for services with money raised by local taxes and receive matching federal funding (also taxes) to cover costs. For Example: In Ohio, an independent investigation by the Columbus Dispatch has shown CVS Caremark charged the state as much as 9 times the cost of a prescription drug while reimbursing local pharmacies below cost - meaning taxpayers are grossly overpaying for common medications - while the PBM CVS Caremark pockets the difference in a practice known as "spread pricing". Issues of this nature have been proven to exist with the largest PBMs at both state and federal levels.