By Jim Morelli
Fox25 Boston: They may be the biggest part of the health care puzzle consumers have never heard of: Pharmacy Benefit Managers — a handful of large companies that, together, touch nearly every prescription medication dispensed in the United States.
“Together they process nearly 75 to 80 percent of all prescriptions nationwide,” said Marc Chammas, co-owner of Sudbury Pharmacy in Sudbury, Massachusetts.
That volume has given Pharmacy Benefit Managers — commonly known as PBMs — enormous power to negotiate discounts from drug manufacturers.
Ideally, those discounts, known in the business as “rebates,” would be passed on to health insurance companies and then to consumers. That would help lower the cost of health care. But critics say that is not happening enough.
“Increasingly, PBMs are using their market power to demand higher and higher rebates which inflate the price of drugs and ultimately consumers are paying more,” said David Balto, an antitrust attorney in Washington, DC, who has testified against PBMs to Congress.
Balto suggests that what the PBMs are really getting from the drug manufacturers is a form of ‘payola.’
“The problem is that payola ends up in that PBM’s pockets and doesn’t reduce the cost of those drugs,” he said.”
By some estimates, the pockets of PBMs are bulging. The National Community Pharmacists Association, which bills itself as The Voice Of The Community Pharmacist, says they are earning billions of dollars in annual revenues.