Latest news with #PharmacyBenefitManager
Business Journals
25-07-2025
- Business
- Business Journals
Waiting for pharmacy benefit manager reform from Washington? Here's what to do now.
If you're frustrated with your pharmacy benefit manager (PBM), join the club. A recent survey found that three-fifths of large-company benefit leaders said their PBM contracts were opaque, overly complicated, and contained clauses that profit the PBM at the expense of employers and patients. Thankfully, you're not stuck. Washington is working on PBM reform, one of the rare issues for which there is agreement between both parties in Congress and the Trump administration. Of course, consensus isn't always enough to create legislation, and any passed law will take time to come into force. A recently-enacted bill in Colorado addresses some of these issues, but will not apply to many large employer-sponsored plans. What follows is a guide to the problems with PBM contracts, the reform proposals, and two approaches to addressing the existing issues that don't require waiting on Washington: Finding a new generation of PBM committed to more transparency; and Negotiating a more transparent arrangement with your current PBM. The problem with large PBMs Pharmacy benefit managers were created to reduce employer costs, yet over time they have evolved in ways that often incentivize increases in plan sponsor and employee costs: Vertical Integration: Nearly 80% of the prescription market (which totaled $600 billion in 2023) is controlled by PBMs run by the three largest health insurance carriers: CVS Caremark (owns Aetna), OptumRX (owned by UnitedHealth Group), and Express Scripts (owned by Cigna). Spread pricing: PBMs charge employers more than they pay pharmacies for drugs, keeping the difference. Drug company rebates: These payments are often in return for PBMs steering business to their products and can include other undisclosed fees. Misaligned Incentives: By favoring their own specialty and mail-order (or retail) pharmacies, PBMs may be restricting competition and limiting their interest in negotiating the lowest pharmacy markups. A recent FTC study found that PBMs often charged employers a markup for specialty drugs distributed through their affiliated pharmacies of more than 100% — and sometimes more than 1,000%. Recently, the big PBMs have started joint ventures to manufacture their own generic and biosimilar drugs, creating another potential conflict. Secrecy: PBM common practices such as spread pricing, rebates, contractual gag clauses, price list manipulation and others have created an environment ripe with opaqueness and confusion for employers. The proposed legislation Congress has been looking closely at PBM reform for several years, and a detailed bipartisan bill was removed from last December's stop-gap budget after Elon Musk tweeted that it was too long. Leading committees are now working to pass something similar. Indeed, two bills that passed Committee last year were reintroduced: The Prescription Pricing for the People Act directs the Federal Trade Commission to complete its ongoing study of PBM practices. The Pharmacy Benefit Manager (PBM) Transparency Act bans spread pricing, incentivizes PBMs to pass 100% of the rebates they receive to plan sponsors, encourages transparency, and requires annual reporting by PBMs of their pricing, reimbursement, and rebate practices. Other proposals go further, including the Patients Before Monopolies Act, which would ban PBMs and insurance companies from owning a pharmacy. The states have been busy as well, increasing their oversight of PBM practices through new legislation and reporting requirements. Unintended consequences of all of this are a concern for consultants and employers looking to control costs. In Colorado, Governor Polis signed HB 25-1094 into law in May. Effective in 2027, this law will regulate how PBMs can earn income, how they structure their formulary, and how they reimburse unaffiliated versus PBM-affiliated pharmacies, among other changes. Unfortunately, this new law won't apply to many large employer-sponsored healthcare programs. So large employers in Colorado are still left to design their own pharmacy strategy. Switching to a transparency-oriented PBM In recent years, more employers have switched their pharmacy programs to a new crop of PBMs who are unaffiliated with large insurers—including Navitus Health Solutions, Rightway Rx, Capital Rx, and SmithRx—and offer a more transparent business model. The advantages Pass-through pricing: Employers get the full benefit of network discounts and rebates, and instead of spread pricing, they pay a disclosed administrative fee per prescription. Fewer conflicts: The independent PBMs are less likely to have pharmacy operations or other business interests that differ from those of employers. Transparent disclosures: Employers get access to granular information about the pricing of each prescription rather than the opaque summaries provided by the large PBMs. Aggressive cost management: The independent PBMs emphasize lower net cost options in their formularies and have strict prior authorization requirements for more expensive drugs. The disadvantages Negotiating intermediaries: Since the upstart PBMs are small, many band together by using rebate aggregators, entities that negotiate lower prices with drug companies. But these negotiations have a downside: They can obscure the details of drug company rebates, especially since most of the aggregators are owned by the same insurance conglomerates that own the big PBMs. Potential disruption: Changing PBMs means employees must adjust to a new formulary, pharmacy network, and prior authorization procedures. Members may also object to the stricter utilization controls these companies use. Buying power: Smaller PBMs do not have the volume that the larger players do and are also unable to take on the risk of aggressive discount and rebate guarantees which can lead to a financial arrangement that appears to be less advantageous for employers. Renegotiating with your existing PBM Many companies that have investigated using a more transparent PBM ultimately decide that the advantages of sticking with a large provider outweigh the frustrations and potential conflicts. They are: Convenience: Dealing with one company that provides medical benefits, pharmacy benefits, and mail-order pharmacy service can be easier for employers and plan members alike. Lower effective prices: Some employers find that the greater bargaining clout of the large PBMs delivers good value even if the mechanics of their arrangements remain murky. Increased transparency efforts: Faced with the prospect of increased regulation, CVS Caremark, Express Scripts, and OptumRX have all announced programs that disclose more information about pricing and pass more of their rebates to employers. As they are just being instituted, their real-world impact remains to be seen. In any case, employers and their advisors can't afford to wait to scrutinize their PBM's business practices and press for more advantageous contracts. The time is now to: Look at the fine print: A typical PBM contract may specify high-level drug discounts, rebates, and dispensing fees. Dig deeper, and you can find exclusions and key definitions, such as what is a 'specialty drug.' Press for full pass-through of rebates: Work through every category and proposed exception to insist that rebates for all drugs go to the employer. Ask about conflicts: How does the PBM interact with its affiliated pharmacies? Are reimbursements different than those for independent pharmacies? Are the dispensed drugs made by brands it owns? Check its approach to cost control: What is its philosophy for adding drugs to its formulary? How does it generate prior authorization guidelines for drugs with high rebates? What percent of authorization requests are approved? Audit performance: At the end of a contract, demand a detailed itemization of all claims to ensure that the PBM has met its commitments. If it hasn't, fight for a financial adjustment. Whether your company decides to find a new PBM or renegotiate its deal with the current provider, there are a lot of details to consider. An experienced broker or consultant will help you sort through those complex contracts designed to confuse. And if Washington does end up passing PBM reform, that advisor will also be able to adapt your plan to take maximum advantage of the new rules. To learn more, contact Chris Mast, an actuary and benefits consultant with Alliant Employee Benefits in Greenwood Village, CO. Mast has worked with employers across Colorado and the US for more than 20 years. He can be reached at Alliant's Pharmacy team is made up of industry experts, pharmacists, and data specialists who provide marketplace perspective and insights, vendor capabilities, and practical knowledge to secure the best pricing and contract arrangements. Our buying power and partnerships enable us to support your benefits strategy, pharmacy program, and cost management throughout the entire program lifecycle. Learn more about Alliant at
Business Wire
21-05-2025
- Business
- Business Wire
HealthEZ Launches EZrx: Redefining Pharmacy Benefits Management
MINNEAPOLIS--(BUSINESS WIRE)--HealthEZ, a national third-party benefits administrator, is proud to introduce EZrx, a next-generation pharmacy solution that leverages six cost-reduction strategies to deliver up to 50% savings compared to traditional pharmacy benefit plans. This solution supports self-funded plans by targeting high-cost prescriptions and optimizing pharmacy spend. EZrx is designed to bring down pharmacy costs by up to 50% compared to traditional PBM solutions. Share EZrx places the clinical review outside of the Pharmacy Benefit Manager, ensuring employers pay the lowest net cost on any medication over $1,000 per fill. This program will soon feature an innovative digital experience, allowing members to compare prices and transfer their prescriptions to the lowest-cost pharmacy with the click of a button. By shifting control of clinical review away from the PBM, EZrx significantly reduces costs by identifying and sourcing medications through the most effective channels while simplifying everything from patient assistance to authorization management. EZrx is a game changer for employers looking to control rising pharmacy costs while ensuring exceptional care for their employees. According to Josh Schreiner, Chief Product Officer at HealthEZ, ' EZrx is designed to bring down pharmacy costs by up to 50% compared to traditional PBM solutions. By managing claims over $1,000, EZrx can identify the lowest net cost channel or alternative medication that can yield maximum savings for our customers while delivering a member incentive to produce a win-win for all parties involved.' Learn more about how EZrx can revolutionize your pharmacy benefits at About HealthEZ HealthEZ is a national third-party administrator helping employers across the U.S. design custom benefit plans that deliver better, more flexible coverage at lower costs. With a fully integrated model and robust digital platform, HealthEZ ensures a seamless experience for members while driving meaningful cost containment. Backed by a dedicated care advocacy team and expert guidance, HealthEZ simplifies self-funding—making it smarter, more efficient, and more effective for employers and their employees.
Yahoo
13-05-2025
- Business
- Yahoo
Marshalltown City Council moves mall project forward
MARSHALLTOWN, Iowa — The Marshalltown City Council voted 6-1 to moved forward with crafting the language of a developers agreement to bring new life into the Marshalltown Mall. The mall would be re-named Shoppes at Marshalltown. 'I'm here in front of you with a grand vision for repurposing the mall,' said developer Glen Kitto. 'We can't attract national tenants without a brand new looking mall, so it's very important for us to get financing in order to make that happen.' Iowa House sends PBM reform bill to governor's desk Kitto estimated there would be 225 construction jobs to rebuild the mall. Once complete, the mall would employ around 250 people. 'What council will do tonight is simply discuss whether or not they want to pursue the writing of a development agreement,' said Carol Webb, Marshalltown City Administrator. 'The information that's contained in tonight's materials relates to major terms of the agreement such as what will, primarily the tax increment financing incentive.' The council's vote was to move forward on terms, but did not approve the 20-year proposal, which under tax increment financing, would raise $7.2 million. If things move forward, a store could open the doors in summer of 2026. So far, no retailers have signed on. Kitto said stores don't want it known what they are planning, but once one signs an agreement, others will follow. Iowa News: Marshalltown City Council moves mall project forward Forecast: Who will see rain this week? Iowa House sends PBM reform bill to governor's desk Congressman Randy Feenstra files paperwork hinting he may run for governor Pharmacy Benefit Manager reform bill to be debated Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
13-05-2025
- Health
- Yahoo
Iowa House sends PBM reform bill to governor's desk
DES MOINES, Iowa — The Iowa House on Monday passed the pharmacy benefit manager (PBM) reform bill and sent it to the governor's desk. PBMs are entities that negotiate the prices for prescription drugs between pharmacies and insurance companies, handle reimbursements to pharmacies, and determines where a patient can get their medications from. Champions for the reform bill say that the current practices of PBMs are detrimental and have resulted in numerous pharmacies closing across the state. Golf tournament raises $30,000 for families of Iowa veterans and first responders in first swing The reform bill, SF 383, passed the House 75 to 15. It requires PBMs to reimburse pharmacies based on the National Average Drug Acquisition Cost for prescription drugs and to reimburse pharmacies with a professional dispensing fee. Following the passage of the bill, the Iowa Pharmacy Association released a statement thanking the Legislature for protecting Iowa pharmacies and their patients. We commend the Iowa House for recognizing the urgent need to address PBM middlemen abuses. This bill is a critical step toward protecting Iowa's local pharmacies and ensuring accountability for PBMs, whose practices have forced Iowa pharmacies to shutter their doors and countless Iowans to lose healthcare access. With states nationwide enacting similar reforms, we're grateful the House and Senate have paved the way for Governor Reynolds to sign this bill and safeguard Iowa's pharmacies and the patients they serve. Iowa Pharmacy Association CEO Kate Gainer The bill is now eligible to be signed into law by Governor Kim Reynolds. Iowa News: Forecast: Who will see rain this week? Iowa House sends PBM reform bill to governor's desk Congressman Randy Feenstra files paperwork hinting he may run for governor Pharmacy Benefit Manager reform bill to be debated Fire causes 'significant' damage to Raccoon River Valley Bike Trail bridge in Adel Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
11-04-2025
- Business
- Yahoo
Competition Bureau advances an investigation into Express Scripts Canada's business practices in the pharmacy sector
GATINEAU, QC, April 11, 2025 /CNW/ - The Competition Bureau has obtained a court order to advance an investigation into Express Scripts Canada, a company that provides prescription drug claim processing services and other services for insurance providers and pharmacists. The company also operates four mail-order pharmacies across Canada, except for Quebec. The order, granted by the Federal Court, requires Express Scripts Canada to produce records and written information, and provide oral testimony, that are relevant to the Bureau's investigation. The Bureau is looking into alleged anti-competitive conduct that can prevent or limit competition in the pharmacy retail market, including: Patient steering through Preferred Provider Networks that force or induce Canadians to use Express Scripts Canada owned or associated pharmacies instead of their pharmacy of choice; and Margin squeezing that reduces the margins of its retail pharmacy competitors by increasing its Pharmacy Benefit Manager service fee and by requiring a costly and burdensome audit process. The Bureau is investigating this conduct under the Competition Act's restrictive trade provisions. These provisions protect against abuse of dominance and agreements or arrangements between businesses that harm competition. There is no conclusion of wrongdoing at this time. Quick facts Express Scripts Canada is a subsidiary of US-based Express Scripts which is owned by the Cigna Group, a US-based global health company. A Pharmacy Benefit Manager, commonly referred to as a PBM, provides prescription drug claim processing services for insurance providers and pharmacists. A Preferred Provider Network agreement, also referred to as a Preferred Pharmacy Network agreement or a PPN, aims to establish a network of "preferred" pharmacies for a particular insurance provider. In this agreement, an insured individual is either required or encouraged to fill their prescriptions from a pharmacy operator in their insurance provider's network. The Competition Act includes provisions to protect Canadian consumers and businesses against restrictive trade practices, including abuse of dominance and agreements that may harm competition. The Bureau is committed to protecting competition in the pharmacy sector. Refer to the Associated links below to learn more about published reports and enforcement action taken in this sector in recent years. Associated links Competition Bureau submission to the Ontario Ministry of Finance consultation on the preferred provider networks in the employer-sponsored drug insurance sector Competition Bureau preserves competition in supply of pharmacy products and services in Saskatchewan Competition Bureau approves transfer of interests in 10 Quebec pharmacies from Metro to Familiprix, McKesson Competition Bureau recommends increasing competition in the sale of pet medication Section 11 order in the Competition Act Changes to the provisions on restrictive trade practices introduced with amendments to the Competition Act in 2022-2024 General information: Request for information | Complaint form Stay connected: X (Twitter) | Facebook | LinkedIn | YouTube | RSS Feed | Email Distribution List The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. Competition drives lower prices and innovation while fueling economic growth. SOURCE Competition Bureau View original content: Sign in to access your portfolio
