Express Scripts' new formulary: The start of a PBM revolution?
Express Scripts' new drug list strategy will unlikely to replace the current system any time soon, but it’s a substantial shift.
By Max Nisen|November 21, 2018 at 10:53 AM
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Express Scripts Holding Co. and other pharmacy-benefit managers make money by negotiating drug prices on behalf of health-plan providers. The list prices that pharmaceutical companies set for their drugs diverge wildly from their real cost, and PBMs widen and feast on the gap, which helps make them some of the principal beneficiaries of America’s byzantine pricing system.
But on Tuesday, ahead of its acquisition by Cigna Inc. and possible regulation, Express Scripts announced a drastic departure from business as usual: a new drug list for clients that favors drugs with lower sticker prices over those that provide huge secret discounts. While unlikely to replace the current system any time soon, it’s a substantial shift for a major PBM, and an acknowledgment of tough political and business realities that could boost a nascent and positive trend in drug prices.
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