Moving to a New PBM Model to Change, and Save, the Industry

Syringe with glass vials and medications pills drug

With pharmacy benefit manager attracting growing public and governmental scrutiny, the industry has to move past current models that hurt patients while lining their pockets. In a new two part article on Forbes, Seth Joseph discusses the issues facing the industry and ways it can move forward to better, more equitable models. Part one explains PBMs and recent problematic shifts in the industry.

According to Joseph, “New incentives led to a new business model, a shift from administrative transaction revenue to retaining rebates from pharmaceutical manufacturers. The new business model led to increased profitability, but also questions about the business practices of PBMs, including: whether PBMs have perverse incentives that result in continually increasing drug prices; whether PBMs’ rebate practices come at the expense of Medicare beneficiaries; and whether PBMs are inappropriately profiting off of “spread pricing” and associated opaque pricing terms kept confidential from their own clients.”

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(Source: Forbes, November 13^th, 2022)