How PBMs are driving up prescription drug costs

When PBMs are overburdened, they can increase costs for patients, not just employers and government programs like Medicare.

The country's most popular Medicare drug plan, SilverScript Choice, covered nearly 3 million Medicare beneficiaries last year. Caremark is its PBM and it overcharges.

Caremark uses Medicare money to pay pharmacies, including its own, about $2,000 a month for a generic blood cancer drug, imatinib, according to a pricing tool on the SilverScript plan website. Because the payment is so high, the out-of-pocket cost for Medicare patients is also high: $664 in most months.

That's more than 10 times the selling price of imatinib – often less than $50 – at online pharmacies when patients forgo insurance and pay with their own money.

For patients, the situation amounts to a “highway robbery,” said Stacie Dusetzina, a drug pricing expert at Vanderbilt University.

The big three PBMs are winning business by promising huge savings. But when customers do the math, many realize that the expected savings don't exist.

Take abiraterone acetate, a generic prostate cancer drug available for well under $200 a month from sources like Mr. Cuban's pharmacy.

According to the PBM's online pricing tool, Express Scripts charged Hyatt nearly $1,500 a month to cover the drug for the hotel company's employees.

Express Scripts pockets most of the difference between what it charges Hyatt and the wholesale cost of the drug. A spokeswoman for Express Scripts, Justine Sessions, said: “An isolated example of a single drug – among the thousands we cover – does not accurately reflect how much a plan has paid for its pharmacy benefits, the savings we help them achieve, and the safety of prescription”. we guarantee, or how much members pay for medications.

Caremark was charging at least one customer, Blue Shield of California, $3,000 a month for the same drug. “The key issue was the incentive structure,” said Paul Markovich, Blue Shield's chief executive. “You can't fight self-interest.” Blue Shield has dropped Caremark as its primary PBM

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