Monday, October 15, 2018

Another big PBM has confirmed it's primary objective isn't to contain prescription drug costs

It is no secret that non-fiduciary pharmacy benefit managers will generally rely on the demands of clients, both current and prospective, for the level of transparency and disclosure it will provide. Express Scripts confirmed as much in the 60 minutes episode The Problem with Prescription Drug Prices by stating and I quote, "it is not contractually obligated to contain costs." If you haven't watched the 60 minutes episode you can read the transcript here.

Now CVS Health has admitted as much as well. In its Q2 2018 earnings call CVS Health writes, "We underwrite contracts to overall level of profitability and many levers available to pull, depending upon the preferences of the client." In layman's terms here is what that means...

CVS HEALTH WILL GENERATE AS MUCH REVENUE AS POSSIBLE AND HOW MUCH WE ARE ABLE TO GENERATE WILL DEPEND LARGELY ON HOW SOPHISTICATED OR UNSOPHISTICATED OUR CLIENTS MIGHT BE.

Non-fiduciary PBMs are couting on two things from self-insured employers:

1. That you remain untrained in the business of managing pharmacy benefits. For the record, sitting through finalist presentations and reviewing responses to RFPs is not training. It's just sitting through presentations and reviewing proposals nothing more.

2. The second is sinister and there is no other way to put it. Non-fiduciary PBMs want that your focus is on employee happiness so that you won't dig deeper into the economics or consider alternatives.

Admittedly, at this level of the business everybody is smart, but not everybody is good at managing pharmacy benefits. Self-insured employers can have both - keep employees happy and pharmacy costs down - the solution starts with education. Period. 

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