The pharmacy benefit management industry has been quietly changing amid healthcare payment reforms and an increasingly fierce debate over drug prices. Now a leadership shuffle at the country's largest pharmacy benefit company has experts speculating that the days of PBMs as stand-alone companies may be numbered.
The sector is dominated by a handful of large players that handle the bulk of prescription drug benefits for employers and health insurers. Their role includes negotiating drug discounts with pharmaceutical companies, building pharmacy networks and creating their own drug benefit plans.
Although PBMs usually play second fiddle to the insurance companies that handle medical benefits, interest in acquiring PBMs has been rising along with the prices of brand-name and generic drugs. Choices about prescription drugs are critical to keeping patients healthy and reducing costs, so controlling a PBM could become an important component of 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.
Skyrocketing spending on prescription drugs was a major reason the growth rate of the nation's healthcare tab increased in 2014 from previous historic lows.
Consequently, drugs have become a hot political issue. Presidential hopeful 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 last week. Her plan came out right after the CEO of Turing Pharmaceuticals, a startup drug company, inflated the price of a decades-old generic drug by more than 5,400%. Public ire prompted the company to revoke the price hike.