Why are PBMs escaping scrutiny?

Well, goody… we get to ponder the implications of another increase in the price of insulin here in the USA. Sanofi and Novo Nordisk have raised the prices of most of their insulins somewhere between 4.4 and 5.2 percent.

As you might expect, this has caused a lot of consternation among those living with and affected by diabetes. As I’ve mentioned here previously, the price of insulin (often, the same insulin) has tripled in the past 15 or 16 years here. People who weren’t previously pissed off are now pissed off, and many who are already pissed off are about to lose it altogether.

I get it. But before you sharpen your pitchfork and start to light a torch (even though no one really ever does those things anymore), let’s step back and consider the whole pricing picture.

Because there’s a lot more than meets the eye when it comes to prescription drugs in America.

Let me ask you: among patients, providers, insulin makers, health insurers, and pharmacy benefit managers, who has never shared anything about what they pay and what they pocket for insulin? Which pane in this insulin window has been the least transparent?

It’s the pharmacy benefit manager.

CVS Health, Express Scripts, and OptumRx are PBMs who, combined, manage prescriptions for 180 million or so in the United States. About 75 percent of the market. They set formularies, those pesky lists of drugs that you can get with a lower co-pay, as opposed to the drug that might actually work best for you.

They help to set prices, playing one insulin maker against another in an effort to try and maximize profit. And they’re probably loving the fact that a lot of the outrage on insulin pricing has been focused on the actual insulin makers themselves.

Yet we don’t know how much they earn off of every vial of insulin they move through their massive warehouses. We don’t know if rebates are involved for insurers, and if those rebates are being applied to lower overall costs for participants in their plans. Or if the rebates are being used to mask an arbitrarily high shadow price for the drug I need to live.

Because pharmacy benefit managers are not telling us anything.

We do know that 75 dollars (USD) a month is about the dividing line for most Type 1 patients… the difference between insulin affordability and insulin rationing to lower costs. That means that an increasing number of Americans, insurance or no insurance, are having to make the hard choice between a life-continuing medication and not paying bills or keeping food on the table.

When did this become okay? This is not okay!

Believe me, I share your outrage when it comes to the crazy spike in insulin prices. Just remember to save some vitriol for the prescription providers too.

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Comments

  • Rick Phillips  On January 25, 2019 at 9:42 pm

    I continue to say that PBM’s are not receiving their fair share of scrutiny in this discussion of insulin pricing. Thank you for educating others about who they are and what they and don’t do.

    Liked by 1 person

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