Pharmacists United for Truth and Transparency said pharmacy benefit managers (PBMs) are the primary driver of high drug prices in the U.S., highlighting how PBMs profit from negotiated savings. The statement was made in an official response on X.
Pharmacy benefit managers (PBMs) act as third-party administrators of prescription drug programs for health insurers, self-insured employers, and government agencies. They negotiate with drug manufacturers to secure discounts and rebates on medications, manage pharmacy networks, and process prescription drug claims. PBMs also provide services such as medication therapy management and mail-order pharmacy services.
A Federal Trade Commission (FTC) report found that the “Big 3 PBMs”—Caremark Rx, LLC (CVS), Express Scripts, Inc. (ESI), and OptumRx, Inc. (OptumRx)—marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent. These significant markups generated more than $7.3 billion in revenue from dispensing drugs at prices far exceeding the estimated acquisition costs from 2017 to 2022. The report also identified the practice of spread pricing, where PBMs charge health plans a higher price for a drug than they reimburse to pharmacies, keeping the difference as profit.
The FTC report highlighted that rebate agreements between PBMs and drug manufacturers may incentivize higher list prices for medications. PBM fees and reimbursement rates were also cited as factors that threaten the financial stability of small pharmacies, potentially reducing patient access to essential medications. Patients in affected areas may face higher out-of-pocket costs and fewer options for obtaining necessary prescriptions.
According to Governor’s Office NY, Governor Kathy Hochul announced new regulations to address rising drug prices linked to PBM practices. The rules target business practices that may lead to increased medication costs, aiming to protect consumers. This initiative is part of broader efforts to make prescription drugs more affordable in New York.
Pharmacists United for Truth and Transparency (PUTT) is an advocacy organization that seeks to expose the role of PBMs in increasing drug costs and supports legislative efforts to reform prescription pricing practices. The organization actively campaigns for transparency and fair practices within the pharmacy industry.
