Employers Are Suspicious of PBM Rx Strategies, NCPA Finds

OCTOBER 01, 2004
Ken Rankin

Managers who make employee health benefit decisions at the vast majority of America's small and medium businesses know little about pharmacy benefit management (PBM) organizations and how to avoid PBM strategies that can drive up their company's health care bill. That is the conclusion of a new study bankrolled by the National Community Pharmacists Association (NCPA) to shed light on what the independent pharmacy group calls "the lack of necessary checks and balances" to keep the PBM industry honest.

After surveying business executives responsible for administering employee health benefit programs, the researchers concluded that "most US small and medium decision makers are simply unfamiliar with the activities of PBMs?with 52% reporting they have no idea whether or not PBMs offer cost-cutting strategies for their businesses or employees."

The survey uncovered widespread suspicion among corporate health care managers regarding the practices of PBMs. Eighty-three percent of health care decision makers expressed concerns that PBMs might be charging their employees more than the negotiated rate for certain types of medications, and 80% raised the possibility that some PBMs may encourage employees to switch drugs in order to increase profits for the PBM.

"Our greatest concern is that PBMs play a dominant role in the health care system, but there is virtually no private sector monitoring or other regulation to govern their practices," said Bruce Roberts, RPh, executive vice president and chief executive officer of NCPA. "This allows PBMs to operate under a cloak of secrecy that keeps businesses from making the best choices for themselves and their employees."

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