No typo here: PBMs ARE OVERCHARGING TAXPAYERS BILLIONS OF DOLLARS!

OptumRx, CVS Caremark, and Express Scripts are pharmacy benefit managers (PBMs), each of which has merged with or vertically integrated into an insurance company. One of the primary concerns regarding PBMs is their role in inflating the prices of prescription drugs.

The problem becomes more pronounced when PBMs are involved in government-funded programs. The impact of PBM pricing practices on taxpayers is particularly significant when considering Medicaid, which provides health coverage to low-income individuals.

PBMs are manipulating the system by using spread pricing, a practice where they charge insurers more for a drug than they pay pharmacies, pocketing the difference. Additionally, by steering or even forcing patients to use their own pharmacies—often those vertically integrated with their insurance companies—PBMs can set copays lower while evading transparency. and paying their owned pharmacies many more times the cost of a medication behind the curtain This arrangement allows them to obscure the true costs of medications, making it harder for patients and regulators to see the full scope of the price manipulation. 

Many states and the federal government have caught on to the price-gouging.

According to a bipartisan legislative  statement, the FTC released an interim staff report revealing that the six largest PBMs manage nearly 95% of all prescriptions filled in the United States to the detriment of independent pharmacies and patients. The report detailed how the largest PBMs employ lopsided and unilateral contracting practices that force unaffiliated pharmacies to enter into one-sided, non-negotiable contracts with the leading PBMs. The report also found that these middlemen have sent billions in inflated payments to their pharmacy subsidiaries, allow[ing] pharmacies affiliated with the three largest PBMs to retain levels of dispensing revenue well above estimated drug acquisition costs, and in some cases, forcing patients with insurance to pay an unreasonably high out-of-pocket cost that is far beyond to the true cost of their prescription drug.”

This overpayment is a direct result of PBMs inflating drug prices and profiting from the difference. Such practices have sparked outrage among policymakers, who argue that these funds could have been better spent on providing more comprehensive healthcare services to vulnerable populations.

In response to growing concerns, there have been calls for increased transparency and regulation of PBMs. Some states have passed legislation to limit the use of spread pricing in Medicaid programs, while federal lawmakers have introduced bills aimed at curbing PBM power and ensuring that savings are passed on to consumers. Progress has been slow until reforms are enacted, taxpayers continue to bear the burden of inflated drug costs due to PBM price gouging. 

If DOGE is serious about cutting out waste, PBMs would be close to their #1 target. 

Thank you for your support! 

Loretta Boesing, Patient Advocate

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