“Transparency” Continues to Drive New PBM Initiatives

A growing number of organizations that offer more transparent pharmacy benefit management services are entering the market. Many of these companies are offering a pricing model in which it passes the discounts it receives from pharmacies and pharmaceutical companies to the health plan/employer sponsor.

Adding to this movement, six national organizations who counsel patients, treat patients, advocate for patients, or provide prescription drug benefits to employees and their families recently joined forces in a new coalition aimed at bringing transparency to the pharmacy benefit management (PBM) market.

The Coalition for PBM Reform which represents independent pharmacies, grocery stores, chain pharmacies, small businesses, health care providers, and patients, is the largest and most diverse effort yet to change the way pharmacy benefit managers operate.

The members include: the National Community Pharmacists Association (NCPA), theFMI – Food Industry Association (FMI), the AIDS Healthcare Foundation (AHF), the National Federation of Independent Business (NFIB), the Coalition of State Rheumatology Organizations (CSRO), and the Community Oncology Alliance (COA).

Not to be outdone, a pair of new PBM companies are being launched to tackle high drug costs – The Mark Cuban Cost Plus Drug Company PBC and the Purchaser Business Group on Health (PBGH), a nonprofit coalition of nearly 40 large public and private employers.

Mark Cuban is funding the new company with the aim of selling generic drugs at a transparent fixed-rate markup. To do so, it is creating an all-in-one pharmaceutical supplier, combining manufacturing, wholesale distribution and pharmacy services under one roof.

PBGH’s new PBM, EmsanaRx, will be housed under an independent for-profit company called Emsana Health. The PBM will start operating next year with a small number of regional medical centers with about 3,000 employees total, said Chief Executive Greg Baker. It aims to negotiate rebates directly with drugmakers, and will allow its clients to examine invoices showing the dollar amounts it receives in rebates. The PBM intends to share 98.5% to 99% of the rebates with its clients, with the remainder going to cover administrative expenses, said Mr. Baker.

Takeaway: Employers are increasingly driving the development of new initiatives to bring transparency to drug pricing by eliminating the PBM middlemen