This report is prepared by Frier Levitt, Commissioned by the Community Oncology Alliance
February 2022
There is growing awareness of the problems and pitfalls with Pharmacy Benefit Managers (PBMs) in the U.S. health care system. Contracted by plan sponsors (including government programs, self-insured employers and insurance companies) to negotiate on their behalf with pharmaceutical companies, these “middlemen” corporations have quietly become an unavoidable part of our nation’s health care system.
Today, fewer than five PBMs control more than 80 percent of drug benefits for over 260 million Americans, from negotiating drug costs, what drugs will be included on plan formularies, to how those drugs are dispensed. Oftentimes, patients are required to receive drugs through PBM-owned or affiliated specialty and mail-order pharmacies and suffer serious, sometimes dangerous, and even deadly, impact of their abuses as a result of medication delays and denials.
However, while the role PBMs play in the U.S. health care system is complex and under scrutiny by both federal and state policymakers and the public, it is increasingly becoming clear that PBMs make up an oligopoly of rich, vertically integrated conglomerates that routinely prey on health care practices, providers, and their patients. PBMs have done this by overwhelmingly abusing their responsibility to protect Americans from this country’s drug pricing crisis, instead exploiting the opacity throughout the nation’s drug supply chain to enrich themselves.
PBMs and Cancer Care
Unfortunately, their impact is only becoming more pronounced, especially in the world of cancer care. Cancer medications are coming out in oral formulations, resulting in a shift away from the medical benefit and into the pharmacy benefit. Since cancer medications are expensive, they are very attractive to PBMs because they yield higher rebates, higher “DIR fees,” and other pricing gimmicks that yield substantial profits.
PBMs and Injectable Biosimilars and Intravenous Chemotherapies
PBMs leverage injectable biosimilars and intravenous chemotherapies for steep originator drug rebates and have begun to institute policies such as mandatory “white bagging” to take the in-office administration out of the hands of patients’ oncologists.
Purpose of this Exposé
The purpose of this exposé is to reveal and explain PBMs’ advantage and leverage by providing transparency where now there is total darkness and delving into the many ways that PBMs have abused their power. This report comprehensively explores and documents the myriad of PBM abuses, and their impact on patient care – focusing especially on cancer care. It explores how the recent levels of consolidation among PBMs and health insurers is adversely impacting cancer care, fueling drug costs, all while allowing for massive profits for PBMs and health insurance companies. Examining the most pervasive and abusive PBM tactics, each section highlights the adverse impact of PBMs on patients, health care payers (including Medicare, Medicaid, employers, and taxpayers), and providers, while also detailing potential solutions.
It is time for action to stop PBM abuses once and for all, and this exposé provides a road map for tackling them one dirty PBM trick at a time.
Access the whitepaper “Pharmacy Benefit Manager Exposé: How PBMs Adversely Impact Cancer Care While Profiting at the Expense of Patients, Providers, Employers, and Taxpayers“ below:
