It's Time for PBMs to Step Up to the Plate

John Jones, RPh, JD

In This Article


It's been a rough year for health plans and organizations that design and implement pharmacy benefit programs. Front-page stories in national newspapers spotlight concerns of employers and government agencies about the industry's perceived inability to control escalating pharmacy costs. Pending legislation threatens to drastically impact how business is conducted. Special interest groups claim that pharmacy management programs just want to save money by reducing access to necessary prescription drugs.

However, the crisis we face today is not because our industry doesn't have the answers. We're in this situation because we don't do what we should to encourage our organizations to adopt strategies that we know will work. As the challenge of caring for an aging population with limited resources grows, our industry must find ways to better educate those buying prescription drug benefits on the value of programs such as managed formularies, disease management, and mail-order pharmacy. The PBM industry has the solutions to today's problems. We must make sure our message is communicated and encourage adoption of solutions that improve quality, increase satisfaction, and lower costs.

For years, employers and health plan members were insulated from the true cost of prescription drugs. With price out of the picture, employees were free to use any prescription drug they wanted -- whether it provided the best value or not. In the past, particularly in times of low unemployment, employers were reluctant to implement strategies such as formularies and utilization management for fear of alienating employees. A rich pharmacy benefit was viewed as necessary to attract and retain employees.

However, in today's era of higher unemployment and double-digit inflation for prescription drugs, tactics to control drug costs have become necessary for the very survival of employee health benefits at many corporations. Many companies have turned to benefit design features such as higher copayments and tiered benefits. These are, in turn, increasing out-of-pocket costs for employees; as this happens, cries of "unfair" are being heard.

While the effort to control costs is necessary, a knee-jerk reaction is not the solution. Simply offloading more member cost-sharing devalues the benefit and will do nothing to improve quality or outcomes. At some point, plan members will say "enough" and demand that the government step in (as is happening with Medicare). Increasing cost-sharing may also price some lower-income plan members out of access to more expensive drugs, resulting in no treatment and, as a result, potentially higher costs.