Companies to bypass PBMs in talks with drugmakers

Hoping to slow the rising cost of healthcare, 50 of the nation's largest employers have formed a purchasing alliance to bargain directly with drug companies on behalf of 5 million employees and their families. The group is being organized by benefits consulting firm Hewitt Associates under the direction of the Human Resources Policy Association, a Washington trade group of senior executives from 220 companies. The 50 employers, which spent $4 billion on prescription drugs last year, plan to negotiate the lowest possible prices on 50 of the most-prescribed medications. The move is a departure from employers' current practice of paying pharmacy benefit managers to provide drug coverage for their workers. According to Hewitt, the nation's employers spend more than $70 billion annually through PBMs, and their drug bills rose 9.1% in 2003, on top of eight years of double-digit increases. The employers would continue to use PBMs to administer thousands of less expensive drugs. Earlier this year, Hewitt and the association announced they would team up on an effort to negotiate lower-cost health insurance options for the employers' uninsured workers and dependents. -- by Laura B. Benko