Pharmacy middlemen known as pharmacy benefit managers deny claims that they’re responsible for inflating the cost of medicine. They say that big drugmakers are the sole culprits for the sticker shock you or whomever pays for your insurance experiences at the pharmacy counter. On the surface, it seems to make sense.
If the pills are ridiculously expensive, the first suspects would be the companies that make them. But new evidence has emerged showing that things aren’t so straightforward. Drug transactions are controlled by middlemen who are owned by huge health conglomerates that also own big insurers.
And a new report says that those companies often list hundreds of different prices for the same drug, some that are 51 times as much as others — or even more. Pharmacy benefit managers, or PBMs have come under fire for years. Community pharmacists accuse them of engaging in anticompetitive practices to the advantage of their own affiliated pharmacies while they drive competitors out of business.
The result, some analysts have said, is decreasing competition and higher prices . The Federal Trade Commission last month issued a scathing report saying it uncovered what appeared to be evidence of anticompetitive practices. It noted that each of the corporations that owns the three biggest PBMs is one of the 15 largest in the United States.
Combined, they went from receiving 12% of all U.S. healthcare dollars in 2016 to 20% last year — a 67% increase in their share of a gargan.