The pharmacy benefit management industry is experiencing subtle changes, and a leadership shuffle at the country's largest PBM has experts speculating about whether PBMs will remain stand-alone companies.
More healthcare organizations view prescription drug use as a critical element of keeping patients healthy and reducing costs, and controlling a PBM could help with a population health strategy. “You could see a pathway forward where the PBMs become more integrated with the payers,” said Jon Kaplan, managing director at Boston Consulting Group.
PBMs handle prescription drug benefits for employers and health insurers, a role that includes negotiating drug discounts with pharmaceutical companies, building pharmacy networks and creating their own drug benefit plans. They usually play second fiddle to the insurance companies that handle medical benefits, but PBMs have become more relevant in recent years due to the rising prices of brand-name and generic drugs.
Skyrocketing prescription drug spending was a major reason the growth rate of the nation's healthcare tab increased from historical lows in 2014. Consequently, drugs have become a bigger political issue. Presidential hopeful and Sen. Bernie Sanders (I-Vt.) has proposed numerous bills over the past few years to control drug prices. Democratic presidential candidate Hillary Clinton outlined her own prescription drug reforms this week. Her plan came out right after the CEO of Turing Pharmaceuticals, a startup drug company, inflated the price of one of its drugs by more than 5,400%—a move that drew widespread ire from the public.
Express Scripts Holding Co. is the largest PBM in the country with about $100 billion in annual revenue. The St. Louis-based company has been notably outspoken about the high sticker prices of new specialty drugs that have hit the market recently, such as the hepatitis C drugs Sovaldi and Harvoni that are manufactured by Gilead Sciences. High-cost drugs have been eating into the profits of PBMs.