ActiveRADAR CEO David Henka tells Healthcare Finance the relationship between drugmakers and pharmacy benefit managers involves little transparency, which plays a significant role in pharmacy costs.
“Nobody knows in terms of a plan sponsor what those contracts are, how much those rebates really cost and what is the translation of that back to the sponsor,” he said.
According to the report, concerns about the effectiveness of PBMs have existed for some time, including in 1998 when the pharmacy middlemen were under investigation by the Justice Department. Then-Assistant U.S. Attorney James Sheehan was looking into PBMs’ ability to cut costs and keep more money in their clients’ coffers.
Henka says PBMs develop contracts that “hide the key rebate amounts.”
“They’re never disclosed to the plan sponsor,” He said. “So, the question is, are they passing along 50 percent of the rebates? Ninety percent? How much are they keeping for themselves? Financially, they’re extraordinarily comfortable entities, so they’re making money somewhere.”
