4. When PBMs are also pharmacies
You've probably heard PBMs tout the savings they negotiate for prescription drugs — and they often do. But Reuters illuminates another side of the business at the country's biggest PBM, Express Scripts — it's also a specialty pharmacy that partners with drug companies to sell new and expensive products.
How it works: Express Scripts' PBM and its specialty pharmacy are walled off from each other, the company told Reuters.
- While the PBM is negotiating discounts off the list prices of drugs (and keeping a slice of those savings for itself), the specialty pharmacy side is hoping to lock down an exclusive contract to distribute a new crop of hemophilia treatments that could cost as much as $1 million.
- Express Scripts already has exclusive distribution rights on at least three other drugs with price tags between $475,000 and $850,000.
The intrigue, via Reuters: "By working as both the manufacturer’s partner who gets paid for each sale, and the pharmacy benefit manager responsible for negotiating the best price for its traditional corporate and government clients, Express Scripts is open to questions about being conflicted, industry sources and experts say."
Between the lines: As PBMs come under fire politically for their rebate structure, they've been sharply disputing charges from critics — including the Trump administration — that they benefit from drugs' high sticker prices.
- Express Scripts doesn't break out its PBM and pharmacy profits, but one analyst told Reuters the pharmacy side is growing faster and accounts for about a third of the company's profits.
The other side: “Our PBM treats our specialty pharmacy as they treat any other pharmacy in our pharmacy network,” the company told Reuters.