Today, there are really only three PBMs - Express Scripts, Caremark and OptumRx - serving 80% of customers. And if there are three gatekeepers for customers, you really have no choice but to sign on the dotted line, no matter the terms. No business, not even one as large as Walgreens, can afford to lose 20-30% of its revenue, which is what happens if you refuse to do business with one of the big PBMs.
In 2015, the big three, with their market power, began lowering reimbursement rates on pharmacies and charging a host of new fees. And that includes doing it even to the second biggest drug store chain in America, Walgreens
CVS made a crucial strategic move and bought Caremark in 2006.
PBMs have increasingly are being scrutinized for regulation & monopoly lawsuits.
OF course CVS CEO is outraged!
https://www.fiercehealthcare.com/payers/cvs-posts-16b-q4-profit-elevated-medical-costs-continue-batter-aetna
“One of the most powerful forces helping to offset rising healthcare costs is PBMs like Caremark,” Joyner said. “These entities remain the only part of the drug supply chain and entirely focused on lowering costs, but have erroneously been subject to deceptive rhetoric and misinformation.”
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Time to repeat that the entirety of USA health and drug industries is a super stinking scandal brought about primarily by corporate and AMA ownership of Congress, and one of the reasons I left the USA as my primary residence decades ago.
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Yes, it appears there are many businesses whose model is to take advantage of inefficiencies they create and perpetuate.
As they become ever more powerful, they create more roadblocks and tool booths until they own everything and no one can compete.
Where are the trust busters? Kneecapped and defanged.
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Absolutely! But you can early retire on the corruption by investing in it (Long, PFE, LLY, MRK)
intercst
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Yes, yes. But… socialized and affordable health care is just hard to do. So hard in fact that only 22 of the 23 most advanced countries on the planet has figure out how to do it.
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All 3 big PBMs are wholly owned by health insurance companies; Aetna/CVS owns Caremark, Cigna owns Express Scripts, and United Health owns Optum RX.
When Optum Rx price gouges on a generic drug, the excess profit isn’t booked as admin costs. It’s booked as a medical expense to the insurer, just like a doctor’s bill or a hospital charge. It’s a way for United Health to get around the 85% MLR requirement that at least 85% of premiums collected be spent on actual health care for customers.
intercst
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Yeah, but they are all COMMIES!!! “Better dead than red”, right?
/sarcasm
Steve
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They already ARE “red”.