The PBM industry started in 1969-1970 and worked for many years under contracts with insurance companies. At some point, all the major PBM’s became licensed insurance companies and were then protected from the Sherman Anti Trust act by the McCarran Ferguson Act, which exempted insurance companies from Sherman Anti trust.
Over the decades, many different states have tried to start having oversight over these PBM companies and each time. The PBM industry would bring out a “army” of lobbyists and attorneys to convince legislators that regulating the industry would cause med prices to rise and community pharmacies – in particular – would make “excessive profits”. In the end, the various legislatures believed them and the industry continued to function without any any oversight and whose financial arrangements were kept hidden.
In the last 5 yrs or so… these types of PBM overcharges are coming to light. The PBM industry controls the price of upwards of 90% of all Rxs filled. This one study is JUST IN ONE STATE (FL) and JUST WITH MEDICAID.
Just imagine, we fill some FOUR BILLION prescriptions every year and the PBM industry controls the pricing of upwards of 90% of those Rxs. All those excess profit that they have generated shows up in your insurance premiums and copays.
Pres Biden says that he wants to lower Rx med prices…. If he doesn’t start with the PBM industry, his efforts will be a ABSOLUTE FAILURE. Given that the insurance industry has one of the LARGEST BUCKETS OF MONEY FOR LOBBYING CONGRESS and now the top 4-5 PBM companies are owned by some major insurance company. I am not expecting much to change.
Filed under: General Problems
Leave a Reply