New educational campaign hopes to clarify role of pharmacy benefit managers in health care

Pharmacy benefits managers, or PBMs, are meant to lower drug prices by acting as a middleman between drug manufacturers and either insurance companies or employers who sponsor health plans. Advocates said employers and consumers often don’t understand what PBMs are and how they work.

Prescription Benefits Matter is a new educational campaign looking to change that.

Joey Fox has testified on behalf of the Association of Health Plans and the Pharmaceutical Care Management Association. He also directs the campaign, which he said is designed for people to better understand the role PBMs play in the price they pay at the pharmacy counter.

“It's a part of the health care system that consumers don't necessarily interact with on a personal level every day,” Fox said. “We want them to know that we are involved. And we are advocating for them and want them to have a better understanding of the value that they're getting.”

By taking over that role in the negotiating process, Fox said PBMs can provide expertise to employers who cover their employee’s health insurance.

“If you are an employer in Indiana and you decide that you want to cover prescription drugs for your employees, you don't have the expertise to call every single drug company, all the pharmacies to figure out which drugs to cover, which ones to maybe not, how much to pay for them, how much to reimburse a pharmacy,” Fox said. “The expertise within these organizations are what they're offering to employers and to consumers to health plans.”

In addition to negotiating for drug prices, PBMs also play a role in how pharmacies actually run.

“They also are the technological backbone of the transactions that happen when you go to the pharmacy counter and pick up your drugs,” Fox said. “All that technology in the background is supplied through a pharmacy benefit manager.”

Fox said PBMs are also behind concepts like getting prescriptions delivered through the mail.

He said there are a lot of things about PBMs that people don’t understand that this campaign is hoping to answer.

“When you sign up at your at your job for health benefits, you just know, 'OK, I've got I've got health care coverage and I know they cover prescription drugs.' But you don't necessarily know what that entity that's there has been doing on your behalf or what value they add,” Fox said.

Ultimately, Fox said the main function of PBMs is to negotiate for lower drug prices for consumers.

However, some Indiana lawmakers have questioned whether PBMs are effective at achieving lower prices. In fact, lawmaker skepticism led to some of the most “aggressive” reforms being approved by the Senate earlier this legislative session.
 

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Senate Bill 140 implements a variety of reforms meant to address concerns about what’s known as vertical integration. Vertical integration refers to when one company owns multiple parts of a certain supply chain, such as a company owning all or part of a PBM, a pharmacy and a drug manufacturer.

Under the bill, PBMs would be prohibited from working with an insurance company that has ownership interest in the PBM. And PBMs would not be allowed to have an ownership interest in a pharmacy.

READ MORE: Senate approves 'aggressive' reforms for pharmacy benefit managers to lower drug prices

Fox said Prescription Benefits Matter is targeting consumers and employers — not members of the General Assembly.

“This is really about getting to Hoosier consumers and Hoosier employers so that they understand that the prescription benefit manager is in the room advocating for them,” Fox said. “Then, they can take actions that they might deem appropriate to ensure that those benefits are protected.”

That campaign will focus on connecting people to information that Fox said already shows Hoosiers are saving about $1,000 per year because of PBMs.

“We've launched PrescriptionBenefitsMatter.org and an affiliated blog with kind of PBM fast facts,” Fox said. “These are ways for consumers to learn what those PBMs are doing for them on a day-to-day basis and the value that they provide.”

Fox said the campaign will include digital, print and radio advertising aimed at helping people understand that having a PBM involved in the health care system saves people money.
 

Abigail is our health reporter. Contact them at aruhman@wboi.org.