Since PBMs act as the ATM of the pharmacy transaction, shouldn't a dollar paid buy a dollar’s worth of goods? Almost, but not quite. Here’s why. The digital transfer of money over telephone wires and through computer services provided by the PBM should necessitate a fair fee. Okay then, a dollar paid should buy a dollar’s worth of goods and services plus an administration fee of some amount.
Question: what is a fair amount for these transaction services? Well here is where the games begin.
Let’s explore the transparent pass-through model to see where the unknowns are. Here is what is supposed to happen. The PBM passes through to the payer all discounts and rebates acquired by the PBM and then charges an administration fee, usually a dollar figure of some agreed upon sort per prescription transaction.
It sounds simple enough. Except there are too many opaque functions handled by the PBM to call this transparent. Rebates are passed on with the understanding that the payer will never see what that agreement with the manufacturer and the PBM actually is. By proprietary agreement, rebate amounts are not disclosed. Nor are rebate admin fees disclosed. Nor are formulary access fees disclosed.
What about the retail network supported by the PBM? Discount agreements between retail pharmacies and PBMs are not disclosed. Generic pricing from a various number of MAC (maximum allowable costs) lists are not disclosed. Different pharmacies have different deals with different PBMs.
Whether or not pricing is figured on the same or different MAC list between what is charged to the payer by the PBM and what is paid to the retail pharmacy is not disclosed. What is the real discount at mail services? Who knows?
Since PBMs are in the middle of the transaction, shouldn’t we be able to see clearly what is owed and what is due for the value of services rendered? Let’s audit the PBM!
Nope. PBMs are not regulated. There are no federal rules that require what a PBM must do or what a payer can see. The PBM sets its own rules. OK, pick an auditor and let’s go to work. Read the contract. PBMs will allow an auditor to audit their books and transactions if both parties (PBM and payer) agree to the auditor. Low and behold, no auditor suggested by the payer is suitable. Now what?
How about letting the PBM charge a reasonable fee by contract that allows you to verify those contracted numbers throughout the service year? Accept that there are many unknowns behind the curtain of PBM transactions. Let PBMs bid on your business and choose the PBM that will allow the payer to build a pharmacy benefit on the lowest unit cost for prescription services. Avoid the rebate game by supporting generic usage. Since every dollar gained in rebates cost many dollars more in plan costs, design a pharmacy plan that avoids this disheartening math. Let APC help navigate through the murk to a reasonable outcome.
