Historically pharmacy benefit managers (PBMs) have been evaluated on their ability to lower total spend on prescription medicines for employers and health plans. They do this primarily by using their collective buying power to obtain discounts from pharmacies and rebates from drugmakers.
According to the Pharmaceutical Care Management Association, over the next 10 years, PBMs are projected to save employers and health plans nearly $654 billion.
That’s a big number. But is that all we should expect out of PBMs?
PBMs are in a unique position to drive down overall drug spend while also helping everyday people understand which medications deliver the best value for money spent.
A recent example can be found in two widely-used medications for high cholesterol: Niaspan and Trilipex. These two medications were approved by the FDA and used since 1997 and 2008 respectively. Last month, the FDA pulled both of these medications and their generic equivalents from the market because their risks far outweighed their benefits. Unfortunately, billions have already been wasted on these medications over the last several years, and patients unnecessarily suffered dangerous side effects for taking them with little to no therapeutic benefit.
What can be done to solve this problem in the future?
It’s more than just about the cost, it’s about the quality too
PBMs employ doctors, pharmacists and data analysts who are laser focused on researching and making recommendations on the safety and effectiveness of medications to avoid health risks and financial impacts to people.
How is this different than the past? Health plans and employers are relying more heavily on PBMs as the rising cost of medications has caused a shift in the health ecosystem, and people are hungry for expert advice on the cost/benefit ratio of drugs.
This offers an opportunity in the evolution of the PBM business.