The President and CEO of the Senior Care Pharmacy Coalition (SCPC) today predicted the increasingly apparent role of Pharmacy Benefit Managers (PBMs) as unaccountable middlemen in the national drug pricing chain will result in a higher level of scrutiny from Congress, regulators and the media in 2017.
A new 1/19 report from the Centers for Medicare & Medicaid Services (CMS) finds that drug companies and pharmacies are paying increasingly larger rebates to PBMs and insurers, but that these middlemen are keeping the money rather than translating it into lower costs for government health care programs and consumers.
CMS data show that since 2010, the growth in rebates or concessions paid by drug companies or pharmacies to PBMs or managed care plans (in addition to the lump sum payment plans received from Medicare) after the point of sale (called Direct and Indirect Remuneration or DIR) has far outpaced the growth in Part D drug costs — on both a total and per-member per-month (PMPM) basis. CMS observed total DIR growth of about 22 percent per year and PMPM DIR growth nearly 14 percent per year between 2010 and 2015. During the same period, total Part D gross drug costs only grew about 12 percent per year, and PMPM Part D gross drug costs only grew nearly 5 percent per year. The DIR that plans report to CMS increased from $31 billion in 2012 to $50 billion in 2015.
Related Coverage
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