Curbing costs by rethinking PBMs

 In the United States, out-of-pocket consumer spending on health care has never been higher, trending toward a projected $491.6 billion — about $1,650 per person — with continued annual growth of 9.9% expected through 2026. Drug costs drive a significant portion of this expense. In 2020 alone, pharmaceutical expenditures in the country grew 4.9%.

Rising drug prices impact everyone, but especially those who struggle to access life-saving medications. With high-cost drugs increasingly out of reach for a growing number of Americans, gaps in care proliferate. Unable to afford crucial treatment or prescriptions, sick populations become sicker, further straining the healthcare system as their conditions become more complicated and expensive to treat. For example, diabetes alone cost the United States $327 billion in 2017, becoming the most expensive chronic disease in the nation. As the cost of insulin has risen, average list prices increased 40% from 2014 to 2018 forcing patients and their families to shell out hundreds of dollars a month, even with good insurance. If current trends continue, gross annual insulin costs could reach $121.2 billion by 2024.

Conversations around reducing drug prices historically point back to pharmaceutical manufacturers, but there are other stakeholders that have a unique opportunity to help drive change within the industry. Pharmacy benefit managers (PBMs) are companies created to maximize drug effectiveness through programs and services aimed at encouraging certain behaviors among physicians, pharmacists and members.