The prescription drug market is officially upside down. We were recently looking at a large coalition’s new initiative to “remove unnecessary drugs” from its formulary. The plan, believe it or not, is to charge coalition members over $3 million in fees to exclude these expensive, unnecessary drugs.
Our response: Really? We have to pay them extra for that? Why were those drugs covered in the first place? Weren’t we already paying them to help us avoid spending money on expensive, unnecessary drugs?
Sadly, the answer is “no.” We’ve actually been paying them to INCLUDE these drugs. Why? Because these particular drugs have a tendency to come with big rebates. And everyone knows that most employers choose PBMs based upon proposed discounts and rebates — not their ability to deliver low cost, high quality medications.
So where does that leave us? By charging a new fee, this PBM and coalition can still propose to benefit plan sponsors with what appear to be attractive pricing terms (high discounts and rebates).
Buyers must recognize that there is more to the deal than the appearance of attractive pricing.