Oct 26, 2021 - Health

New drug benefits companies need employers to pick them

Illustration of money pouring into a prescription bottle. 
Illustration: Aïda Amer/Axios

Winning over employers is the biggest hurdle facing two new drug benefits companies — one created by billionaire Mark Cuban's startup drug firm and another created by a coalition of large employers.

Why it matters: The projects won't go far if major employers don't shift their business away from the dominant incumbents to these new firms.

The big picture: Three pharmacy benefit managers — Express Scripts, CVS Caremark and OptumRx — control roughly 80% of the market.

Yes, but: Large companies like Boeing, Disney, Intel and Walmart make up the Purchaser Business Group on Health, which is starting a PBM called EmsanaRx. "The industry has really been unresponsive to their concerns," said Elizabeth Mitchell, PBGH's CEO.

  • PBGH can't force its member companies to end or switch their PBM contracts, but the group is "very encouraged" about winning employers during open bids, Mitchell said.

The bottom line: These new companies are looking to strip away the games within drug pricing contracts, like rebates and spread pricing. There's a big appetite for change, but success ultimately will depend on employers ditching the current oligopoly.

Go deeper: The drug pricing contract Express Scripts doesn't want you to see

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