The SEC forced pharmacy benefit manager Express Scripts to break out a seemingly benign number from its balance sheet. It has to do with the rebates it collects from pharmaceutical firms.
Experts say it’s weird that the company wasn’t breaking this out before.
The number does, however, speak to a lot of concerns people have about PBMs in general, and who they’re actually serving — their clients or big pharma.
The SEC has been trying to get to the bottom of a very important question for Express Scripts, the country’s biggest pharmacy benefits manager (PBM).
The question is: Who are your clients?
Ideally, in Express Scripts’ business, the client is ultimately you — or whoever pays for your health insurance. The company manages lists called formularies that determine what your insurer will and will not pay for. It’s like a gatekeeper, and it’s the biggest gatekeeper in the country. It, along with PBMs run by CVS and UnitedHealth control 80% of all covered lives in the US.
It is paid by insurers and employers to do this, and the point is to keep costs down — to get you the best medication as cheaply as possible and take on the complicated process of choosing what drugs are worth paying for.
Part of how PBMs do this is by setting up rebates with drug companies. The PBM keeps a portion of it, and passes the rest on to you.
But all of the details of that are top secret. That is to say, why you pay the price you pay is all a black box.
Some people are starting to have a problem with that.
Over the last year or so Washington has been wondering if enough of those rebates are actually being passed along to you. It’s also wondering if those rebates incentivize PBMs to choose expensive …read more
Source:: Business Insider