Posted by Michael Wonder on 20 Jun 2019
Pharmacy benefit manager reform: lessons from Ohio
20 June 2019 - Addressing soaring prescription drug prices is a health care reform priority in the United States.
While the pricing practices of pharmaceutical companies have been a subject of intense scrutiny and reform proposals, so have the practices of pharmacy benefit managers (PBMs), who are intermediaries in the drug supply chain.
PBMs—third-party administrators of pharmacy benefits—arose in the 1980s to manage patient access to drugs through coverage and formulary designs on behalf of payers. The influence of PBMs on patients’ access to drugs and the affordability of medications has increased substantially since then. The industry has also consolidated, with the 3 largest PBMs—Express Scripts, OptumRX, and CVS Caremark—accounting for more than 85% of the market.
In 2017, Express Scripts reported an annual revenue of $100 billion. These revenues far exceed those of some of the highest capitalised pharmaceutical companies, such as Pfizer, with a reported annual revenue of $52 billion in 2017.
