Express Scripts met with analysts at banking giant Barclays in March and mentioned how its "industry-leading EBITDA per claim" — a measure of profit they collect on each prescription — likely will be "sustainable over time," according to Barclays' note to Wall Street. Those comments come as each of the big three pharmacy benefit managers are being attached to health insurers.
The big picture: Some PBMs use a different "transparent" model to earn money, but they are in the minority. New documents obtained by Axios peel back the curtain on the traditional drug benefits business, though many details remain hidden from public view.
Some new documents shed light on how PBMs make money, and also reveal how difficult it is to get the full picture:
Nashville uses Express Scripts to provide drug benefits to city employees, and its publicly available 2017 contract lays out actual financial terms — including rebates. Many of the contract's definitions are also identical to the template Axios previously published — including the brand/generic algorithm.
The state of Delaware amended its contract with Express Scripts a few years ago to ensure that Express Scripts guaranteed more rebates, according to a copy of the contract.
Axios obtained an OptumRx pharmacy benefits proposal through New Jersey's open records law. New Jersey awarded its pharmacy benefits deal to OptumRx last year. However, several sections that outline financial terms for the taxpayer-funded prescription drug deal are "exempt from public disclosure." OptumRx did not respond to questions.
What we're hearing: Many people that work in the industry are voicing disdain for the business models and lack of transparency associated with the main players.
West Virginia's Medicaid program kicked PBMs to the curb last year. The state uses health insurers to run Medicaid, and it said it would no longer pay insurers to contract with CVS and Express Scripts for pharmacy benefits.
Vicki Cunningham, West Virginia's director of pharmacy, said the PBM costs were "excessive" and "not sustainable." The state expects to save $30 million this year by acting as its own pharmacy benefit manager.
Arkansas passed a law requiring PBMs to be licensed through the state's insurance department.
Ohio lawmakers are looking into how health insurers pay PBMs and how PBMs pay pharmacies, according to the Columbus Dispatch.
Go deeper: A Bloomberg story on how PBMs book their profit, and the American Prospect on PBM antitrust concerns.
President Trump views the North Korean crisis as his “great man” of history moment.
The big picture: He came into office thinking he could be the historic deal maker to bring peace to the Middle East. He’s stopped talking about that. There’s very little point. The peace deal looks dead and cremated. But Trump wants to sign his name even larger into the history books, and he views North Korea as his moment.
Sources close to him say he genuinely believes he — and he alone — can overcome the seemingly intractable disaster on the Korean Peninsula.
A source who has discussed North Korea with Trump: “He thinks, ‘Just get me in the room with the guy [Kim Jong-un] and I’ll figure it out.’”
But, but, but: His aides are much more skeptical, and some believe the idea of meeting with Kim Jong-un is naive and guaranteed to be fruitless.
Trump “definitely thinks it’s a duel of personalities,” says another source familiar with his thinking about North Korea:
“There are important strategic considerations ... but he also very much conceives it as a test of wills and of a contest of one man and another. How they’re going to react, how they’re going to shadow box with each other, and ultimately how they’re going to choose to act.”
“During the war of insults between Trump and Kim last year, Trump’s tweets and ‘little Rocket Man’ were pretty carefully calibrated — in his mind, was more intentional, not just popping off.”
“He never clearly articulated what he was trying to do. But it seemed he wanted to demonstrate he and the U.S. were unafraid, prepared to take whatever steps necessary and were willing to be direct. He wanted to show dominance over Kim.”
“This was something he took a personal interest in and was personally invested in. I’m not sure people thought it was a coherent strategy, and certainly I don’t think the Pentagon signed off on it.”
Be smart: Trump mostly projects strength internally. But there’s also been at least one quiet moment when a source saw Trump reflect on how he doesn’t know what Kim is capable of.
That happened during the escalating verbal sparring between Kim and Trump last year: “The stakes had moved so far beyond what he’s dealt with before, he definitely became aware of that.”
P.S. Trump on his planned summit with North Korea, speaking last evening at a joint press conference at Mar-a-Lago with Japanese Prime Minister Shinzo Abe:
" If we don't think it's going to be successful, ... we won't have it. ... If I think that it's a meeting that is not going to be fruitful, we're not going to go. If the meeting, when I'm there, is not fruitful, I will respectfully leave the meeting."
