Two Large PBMs Agree to New Purchasing Model
Caremark Rx and Medco Health Solutions, two large pharmacy benefit managers, have agreed to participate in a new purchasing model under which they will disclose to clients the amount that they spend to purchase retail and mail-order prescriptions, as well as the amount of price rebates that they receive from pharmaceutical companies, the Wall Street Journal reports.
Eight smaller PBMs also have agreed to participate in the purchasing model, which a coalition of 56 large employers -- such as Ford Motor, Caterpillar, Starbucks and IBM -- developed to increase the transparency of the business practices of PBMs. Express Scripts, a third large PBM, has not agreed to participate in the purchasing model.
According to the employers, the "complex financial arrangements PBMs have with drug makers make it difficult for them to know if they're getting the best price for their employees' medicines," and the purchasing model will "certify PBMs that are willing to follow the group's criteria for transparency, giving employers an alternative that puts pressure on their own PBMs to change," the Journal reports. This year, only Starbucks and an unidentified employer have contracted with a PBM through the purchasing model, but 17 other employers have considered the move, the coalition said.
According to the Journal, to "what extent the PBM giants will have to switch to the coalition's business model remains to be seen," as many employers "are locked into multiyear contracts," and some might "prefer not to pay the administration fees charged under the new model." Sidney Banwart, vice president of human services at Caterpillar and chair of the coalition, predicted that PBMs "outside the circle who haven't bought into this will be doing everything they can to hold on to market share" (Fuhrmans, Wall Street Journal, 7/24).