I’ve long been known as a strong advocate for the small- and medium-sized business owner getting a fair shake and lower prices as they do right by their employees by providing good benefits and stabilizing the costs of it all. So why am I shaking my head? Because these are all a lot of Johnny-come-latelies as we at ECCHIC have known what these PMBs are for years and create plans for employers to avoid them completely.
I have to shake my head a little at all the sudden attention Pharmacy Benefit Managers (PBMs) and their lack of transparency (and suspected price gouging) is suddenly getting. The U.S. Senate Finance Committee called some of these PBMs to testify this month. In a speech in May, President Trump took aim at “getting rid of the middle men.” Meanwhile, in related news, the Pharmaceutical companies are reporting record profits. (And to add insult to injury, they aren’t paying taxes on their billiions of profits.)
If you look up what PBMs do, you’ll find one definition that claim these “benefit managers” work to “reduce prescription cost and improve convenience and safety.” But they are “middle men” who process prescription medication claims for insurance companies and plan sponsors. They take a fee for that, they add to administration costs, and by refusing to reveal details of their process, keep us from knowing our costs. If we don’t know our costs, we can’t control it.
There’s a better way. Employers must consider bypassing PBMs and working directly with their local independent pharmacies. Trending:
- Large employers like Caterpillar eliminate these middlemen and have saved millions.
- States like West Virginia have bypassed PBMs and worked directly with their local pharmacies and have saved tens of millions per year.
We have advocated and shown small- and medium-sized employers how to do the same thing. These groups have saved tens of thousands and hundreds of thousands by fighting against it. Understand that the cost of prescriptions across the counter is substantially less than by adding PBM mark-ups, insurance company mark-ups, broker commission and fees, and administration fees which are clandestinely hidden in premiums and higher costs for the same drugs.
The catch? You have to be a forward thinking and realistic employer and pharmacist to change this direction. Employers and independent pharmacies that we have directly connected for the employer-sponsored health insurance programs have experienced the following:
- Lower costs to the employer’s health insurance program.
- Better benefits, service, and guidance for the employees.
- Better margins and better profitability for the independent pharmacies.
- Bonus: Money kept in the community, benefiting all the good people who live there.
You could rely on our politicians to address this issue for you through their lengthy hearings that stretch out until they are to run for office again and thus maybe “earn” campaign contributions from this very industry that is gouging us. Or you can join our fight. This issue has to be resolved at the grass-roots level, and we are partnering with business owners every day with great success. You must take this control of this business back and away from this cabal of insurance companies and PBMs. And you can.