They’d use their buying power to negotiate for lower drug prices from manufacturers and pass the savings on to their members.
But before long, PBMs started to consolidate. Now, 75% of the entire market is run by 3 PBMs owned by Cigna, CVS, and UnitedHealth. And since the pricing for their drugs is kept secret, their focus has shifted to chasing profit for themselves — through spreads and rebates — instead of passing on savings to you and your employees.
Some PBMs try to stop consumers from finding out when their copay for a drug is higher than the list price. One strategy: Imposing gag orders on pharmacists.
Sky-high prescription drug costs threatened to bankrupt an entire town. Now, the town is suing a pharmaceutical manufacturer and a PBM.
The PBM owned by CVS — CVS Caremark — was hit with a lawsuit for illegally charging Medicare more than it was paying pharmacies for medications.
This study from USC’s Center for Health Policy & Economics delves into the economics of prescription drug overpayments.