The Push To Reform Pharmacy Benefit Managers And Improve Pricing Transparency

The healthcare industry is a layered one. Within those layers is the pharmacy industry, which includes more than 44,000 individual drug stores and pharmacy locations across the U.S.

And that industry itself has layers. 

In recent months, industry leaders and trade organizations have been pushing for increased regulation and reform of the practices used within one of those layers: pharmacy benefit managers. At UnitedRX, we support those efforts. 

Pharmacy benefit managers, also referred to as PBMs, are third-party entities that act as intermediaries between insurance companies and manufacturers of pharmaceutical products. Their role includes negotiating rebates with manufacturers, processing claims, creating pharmacy networks and formularies, and reviewing medication utilization. 

As U.S. healthcare costs remain a concern, if a barrier to care for some, more eyes are focusing on the role of the PBM. That layer within the industry, which essentially administers prescription drug benefits for insurers, has been known to slow down the prescription process. Just three entities control a majority of the market, and PBM practices are seen as at least one culprit in escalating and nontransparent drug prices. 

In response, a number of industry leaders are calling on Congress to enact reforms in the name of leveling the playing field and improving cost transparency as well as drug prices. 

A Look At PBM Problems

In a letter addressed to the U.S. House and Senate leadership in early February, a coalition of national pharmacy advocates pleaded with elected officials to enact PBM reforms “without delay.” The letter noted the previous bipartisan advancement of PBM-related reform initiatives, and urged congressional leaders to act in a way that halts the “harmful and aggressive” tactics that some PBMs utilize.

One of those tactics is known as spread pricing. 

A practice that has been blamed for increasing the cost of prescription medication to consumers, spread pricing is PBM charges a health plan more medication than the PBM will pay the pharmacy that provides it. In their letter to congressional leaders, industry advocates have asked for a ban on the practice. 

One of the reasons PBMs have been able to utilize a spread pricing protocol is because they rarely — if ever — make their pricing agreements with manufacturers public. Industry advocates are asking for that to change. 

Who Is Applying Pressure?

While there are many moving parts within the PBM debate, a number of industry associations are taking the lead on applying pressure to those who have the ability to create change and lasting reform. 

The National Community Pharmacists Association, of which UnitedRX is a member, has been leading the charge in gaining bipartisan traction on the issue and advancing policy in both congressional chambers. 

In addition, the National Association of Chain Drug Stores, the National Grocers Association, the American Pharmacists Association, the National Association of Specialty Pharmacy and the Food Industry Association are all supporting this effort. 

PBM reform, if handled correctly, will ultimately help reduce the cost of prescription medications to consumers — in part — by mandating improved pricing transparency and regulating certain practices within the industry. 

At UnitedRX, we deliver a hometown pharmacy experience to more than 400 clients across the country. Contact us to learn more about how our approach to treatment can meet the pharmacy needs of your long-term care facility.