When PBMs overcharge, it can drive up costs for patients, not just employers and government programs like Medicare.
The nation’s most popular Medicare drug plan, SilverScript Choice, covered nearly 3 million Medicare beneficiaries last year. Caremark is his PBM and overcharges.
Caremark uses Medicare money to pay pharmacies, including its own, about $2,000 a month for a generic blood cancer drug, imatinib, according to a billing tool on the SilverScript program’s website. Because this payment is so high, the out-of-pocket cost for Medicare patients is also high—$664 most months.
That’s more than 10 times what imatinib sells for — often less than $50 — at online pharmacies when patients forego insurance and pay out-of-pocket.
For patients, the situation is the equivalent of “highway robbery,” said Stacie Dusetzina, a drug pricing expert at Vanderbilt University.
Combating Vested Interests
The big three PBMs are winning business by promising huge savings. But when customers do the math, many realize the expected savings don’t exist.
Take abiraterone acetate, a generic prostate cancer drug available for well under $200 a month from sources like Mr. Kuban’s pharmacy.
Express Scripts charges Hyatt nearly $1,500 a month to cover the drug for the hotel company’s employees, according to the PBM’s online billing tool.
Express Scripts picks up most of the difference between what Hyatt charges and the drug’s wholesale cost. An Express Scripts spokeswoman, Justine Sessions, said: “A single example of a single drug — among the thousands we cover — does not accurately reflect how much a plan paid for pharmacy benefits, the savings we help them achieve and the safety of prescribing we ensure or how much members pay for drugs’.
Caremark charged at least one customer, Blue Shield of California, $3,000 a month for the same drug. “The fundamental issue was the incentive structure,” said Paul Markovich, Blue Shield’s chief executive. “You can’t fight self-interest.” Blue Shield dropped Caremark as its primary PBM
