Businesses often lack insight into the operations of pharmacy benefit managers they hire to administer their employees’ medication benefits, as revealed in a new KFF survey published today.
The survey questioned company officials on the amount of rebates returned by pharmacy benefit managers (PBMs) from drugmakers. With conflicting claims about where the money goes, PBMs argue they save companies billions through rebates while drugmakers say they inflate prices to meet PBM demands for rebates.
Testifying in Congress, leaders of major PBMs like CVS Caremark and Express Scripts stated that the majority of the rebates collected are passed on to employers, contrary to popular belief.
Despite this, the KFF survey highlights that many employers remain unsure about the distribution of rebates, with only a fraction directly benefiting from them. This uncertainty exposes a lack of understanding among employers about how PBMs operate.
Amidst these complexities, some critics accuse PBMs of using intricate strategies to conceal the true extent of rebates. They argue that employers are often at a disadvantage due to the lack of transparency in pricing policies within the industry.
Entrepreneur Mark Cuban has ventured to challenge PBMs with a transparent pricing model for pharmaceuticals, emphasizing the need for executives to better comprehend their PBM agreements to avoid financial losses.
The KFF survey underscores the challenges faced by employers in navigating the complex world of PBMs, raising concerns about the lack of oversight and accountability within the industry.
As companies grapple with escalating healthcare costs, the survey shows a notable increase in premiums for employee coverage, prompting a push for more transparency and clarity in PBM contracts.
For employers seeking to optimize their healthcare expenditures, understanding the nuances of PBM operations is crucial to making informed decisions and ensuring cost-effective benefits for their employees.
