When PBMs overcharge, it can increase costs for patients as well as employers and government programs such as Medicare.
SilverScript Choice, the nation's most popular Medicare drug plan, covered about 3 million Medicare beneficiaries last year. Caremark is its PBM, and it has been accused of overcharging.
Caremark uses Medicare funds to pay pharmacies, including its own, about $2,000 a month for the generic blood cancer drug imatinib, according to a pricing tool on the Silver Scripts Plan website. The high payment also means Medicare patients have to pay high out-of-pocket costs, which run up to $664 most months.
This is more than 10 times the price that imatinib costs from online pharmacies (which are often less than $50) if patients do not have insurance and have to pay out of pocket.
For patients, the situation amounts to “robbery,” said Stacey Ducetsina, a drug pricing expert at Vanderbilt University.
Fighting self-interest
The big three PBMs win business by promising big savings, but when clients do the math, many find that the expected savings don’t exist.
Abiraterone acetate, for example, is a generic prostate cancer drug that's available from places like Cuban's pharmacy for under $200 a month.
Express Scripts bills Hyatt about $1,500 a month for medications for the hotel company's employees, according to the PBM's online pricing tool.
Express Scripts pockets much of the difference between what it charges Hyatt and the drug's wholesale price. “No individual drug from the thousands of drugs we cover accurately reflects how much plans paid for pharmacy benefits, how much we helped them save, how well we ensured prescription safety, or how much members paid for their drugs,” Express Scripts spokesman Justin Sessions said.
Caremark sold the same drug to at least one client, Blue Shield of California, for $3,000 a month. “The fundamental problem was the incentive structure,” said Blue Shield CEO Paul Markovich. “You can't fight self-interest.” Blue Shield dropped Caremark as its major PBM.