{"id":1121,"date":"2024-10-09T09:00:00","date_gmt":"2024-10-09T09:00:00","guid":{"rendered":"https:\/\/medical-article.com\/?p=1121"},"modified":"2024-10-09T09:00:00","modified_gmt":"2024-10-09T09:00:00","slug":"employers-havent-a-clue-how-their-drug-benefits-are-managed","status":"publish","type":"post","link":"https:\/\/medical-article.com\/?p=1121","title":{"rendered":"Employers Haven\u2019t a Clue How Their Drug Benefits Are Managed"},"content":{"rendered":"

Most employers have little idea what the pharmacy benefit managers they hire do with the money they exchange for the medications used by their employees, according to a KFF survey released Wednesday<\/a> morning. <\/p>\n

In KFF\u2019s latest employer health benefits survey, company officials were asked how much of the rebates collected from drugmakers by pharmacy benefit managers, or PBMs, is returned to them. In recent years, the pharmaceutical industry has tried to deflect criticism of high drug prices by saying much of that income is siphoned off by the PBMs, companies that manage patients\u2019 drug benefits on behalf of employers and health plans.<\/p>\n

PBM leaders say they save companies and patients billions of dollars annually by obtaining rebates from drugmakers that they pass along to employers. Drugmakers, meanwhile, say they raise their list prices so high in order to afford the rebates that PBMs demand in exchange for placing the drugs on formularies that make them available to patients.<\/p>\n

Leaders of the three largest PBMs \u2014 CVS Caremark, Optum RX and Express Scripts \u2014 all testified in Congress in July<\/a> that 95% to 98% of the rebates they collect from drugmakers flow to employers.<\/p>\n

For KFF\u2019s survey of 2,142 randomly selected companies, officials from those with 500 or more employees were asked how much of the rebates negotiated by PBMs returned to the company as savings. About 19% said they received most of the rebates, 27% said some, and 16% said little. Thirty-seven percent of the respondents didn\u2019t know.<\/p>\n

While a larger percentage of officials from the largest companies said they got most or some of the rebates, the answers \u2014 and their contrast with the testimony of PBM leaders \u2014 reflect the confusion or ignorance of employers about what their drug benefit managers do, said survey leader Gary Claxton, a senior vice president at KFF, a health information nonprofit that includes KFF Health News.<\/p>\n

\u201cI don\u2019t think they can ever know all the ways the money moves around because there are so many layers, between the wholesalers and the pharmacies and the manufacturers,\u201d he said.<\/p>\n

Critics say big PBMs \u2014 which are parts of conglomerates that include pharmacies, providers, and insurers \u2014 may conceal the size of their rebates by conducting negotiations through corporate-controlled rebate aggregators, or group purchasers, mostly based overseas in tax havens, that siphon off a percentage of the cash before it goes on the PBMs\u2019 books.<\/p>\n

PBMs also make money by encouraging or requiring patients to use affiliated specialty pharmacies, by skimping on payments to other pharmacies, and by collecting extra cash from drug companies through the federal 340B drug pricing program, which is aimed at lowering drug costs for low-income patients, said Antonio Ciaccia, CEO of 46brooklyn Research.<\/p>\n

The KFF survey indicates how little employers understand the PBMs and their pricing policies. \u201cEmployers are generally frustrated by the lack of transparency into all the prices out there,\u201d Claxton said. \u201cThey can\u2019t actually know what\u2019s true.\u201d<\/p>\n

Billionaire Mark Cuban started a company to undercut the PBMs by selling pharmaceuticals with transparent pricing policies. He tells Fortune 500 executives he meets, \u201cYou\u2019re getting ripped off, you\u2019re losing money because it\u2019s not your core competency to understand how your PBM and health insurance contracts work,\u201d Cuban told KFF Health News in an interview Tuesday.<\/p>\n

Ciaccia, who has conducted PBM investigations for several states, said employers are not equipped to understand the behavior of the PBMs and often are surprised at how unregulated the PBM business is.<\/p>\n

\u201cYou\u2019d assume that employers want to pay less, that they would want to pay more attention,\u201d he said. \u201cBut what I\u2019ve learned is they are often underequipped, underresourced, and oftentimes not understanding the severity of the lack of oversight and accountability.\u201d<\/p>\n

Employers may assume the PBMs are acting in their best interest, but they don\u2019t have a legal obligation to do so.<\/p>\n

Prices can be all over the map, even those charged by the same PBM, Ciaccia said. In a Medicaid study he recently conducted, a PBM was billing employers anywhere from $2,000 to $8,000 for a month\u2019s worth of imatinib, a cancer drug that can be bought as a generic for as little as $30.<\/p>\n

PBM contracts often guarantee discounts of certain percentage points for generics and brand-name drugs. But the contracts then contain five pages of exclusions, and \u201cno employer will know what they mean,\u201d Ciaccia said. \u201cThat person doesn\u2019t have enough information to have an informed opinion.\u201d<\/p>\n

The KFF survey found that companies\u2019 annual premiums for coverage of individual employees had increased from an average of $7,739 in 2021 to $8,951 this year, and $22,221 to $25,572 for families. Among employers\u2019 greatest concerns was how to cover increasingly popular weight loss drugs that list at $2,000 a month or more.<\/p>\n

Only 18% of respondents said their companies covered drugs such as Wegovy for weight loss. The largest group of employers offering such coverage \u2014 28% \u2014 was those with 5,000 or more employees.<\/p>\n

KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\n

USE OUR CONTENT<\/h3>\n

This story can be republished for free (details<\/a>).<\/p>","protected":false},"excerpt":{"rendered":"

Most employers have little idea what the pharmacy benefit managers they hire do with the money they exchange for the medications used by their employees, according to a KFF survey released Wednesday morning. In KFF\u2019s latest employer health benefits survey, company officials were asked how much of the rebates collected from drugmakers by pharmacy benefit…<\/p>\n","protected":false},"author":0,"featured_media":1122,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1121","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"_links":{"self":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts\/1121"}],"collection":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1121"}],"version-history":[{"count":0,"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts\/1121\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/media\/1122"}],"wp:attachment":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1121"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1121"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1121"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}