CODE WHITE: THE PBM PARADOX

In today's world, access to health should be a basic right, not a privilege. Yet, we are seeing healthcare costs skyrocket year after year, leaving millions of people to make impossible choices between life-saving medications and other essential needs like food, bills, and transportation. The media highlights the growing demand for affordable healthcare, yet many essential medications remain out of reach for those who need them most. Why is this? Why are the drugs we rely on to combat infections or manage chronic conditions so prohibitively expensive for the average person?

The answer lies in a tangled web of greed, systemic flaws, and monopolistic practices within the healthcare system. While the pharmaceutical market is riddled with harsh realities, there is a distinct lack of transparency regarding the factors that drive unjust pricing. In many ways, the true cost of healthcare is being exploited, rather than made accessible to those in need.

One of the primary culprits behind the relentless price hikes and unavailability of vital medications is the role of Pharmacy Benefit Managers (PBMs). While PBMs are not widely known to the public, they wield significant influence in the healthcare landscape. These middlemen act as intermediaries between insurance companies, drug manufacturers, and pharmacies, managing prescription drug benefits for insurance plans. PBMs determine which medications are covered by your insurance, how much you'll pay for them, and often negotiate prices and discounts with drug makers and pharmacies.

You might be wondering: how can one entity have so much control over so many aspects of healthcare? The truth is, PBMs operate with little transparency, often working behind closed doors to strike financial deals that benefit themselves, not patients. They control the "formulary" — a list of medications covered by insurance plans — and have financial arrangements with drug manufacturers and insurers that are never disclosed to patients or pharmacists. In many cases, PBMs prioritize their own profits by favoring medications that generate the highest rebates, even if those drugs are not the most cost-effective for patients.

As a result, patients are left with higher out-of-pocket costs and suboptimal treatment options. PBMs also manipulate the way medications are covered by insurance, placing some on higher tiers, which leads to steeper costs for patients. Who benefits from this? Not the patient — but the PBM itself, which profits from higher rebates provided by drug manufacturers. This means patients are not only burdened with unaffordable medications, but they also don’t always receive the best treatment for their condition.

The inflated drug prices are further exacerbated by PBMs' hidden financial incentives. These companies mediate between multiple parties, creating unnecessary complexity and costs that offer no direct benefit to the patient. PBMs do not disclose the amount of money they receive in rebates or fees, allowing them to inflate prices without accountability.

Take CVS Caremark, for example — one of the largest PBMs in the industry. They not only determine which drugs are covered by insurance plans, but they also negotiate discounts and rebates with drug manufacturers. This gives CVS Caremark the power to make certain medications more affordable for patients, while others remain prohibitively expensive. What’s more concerning is that CVS Caremark is owned by the same company that runs CVS pharmacies, giving them an unfair advantage. They use their influence to steer patients to their own chain of pharmacies, making it nearly impossible for independent pharmacies to compete.

CVS Caremark isn’t alone. Other major PBMs like Express Scripts and OptumRx also dominate the market, perpetuating the same harmful practices. These PBMs, with their overwhelming control over the prescription drug market, continue to profit at the expense of patients and smaller pharmacies. They set prices, negotiate hidden rebates, and funnel patients toward specific pharmacies — all for their own financial gain.

The monopolization of the PBM industry is a glaring issue, yet there is little indication that any meaningful reform is on the horizon. PBMs have too much power, and their influence is detrimental to patients who are already struggling to afford the medications they need.

Ultimately, PBMs are not working in the best interest of the patient; they are working to line their pockets. Until the healthcare system addresses the unchecked power of PBMs and the exploitative pricing practices they foster, millions of people will continue to bear the brunt of an unjust system.