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Companies and unions have reportedly been switching their pharmacy benefit managers. or PBMs, over concerns that they’re being steered towards costly drugs when cheaper alternatives are available.
According to a Wall Street Journal report, some employers and unions are concerned that they are being told to cover higher cost drugs because PBMs can profit from rebates offered by drugmakers. The Journal added that whether the PBMs were actually profiting from the rebates was unclear as many aren’t very open about their fees and other sources of revenue.
Employers and unions that have recently switched their PBMs are Foot Locker, which dropped United Health Group’s (NYSE:UNH) Optum Rx last year; the Teamsters fund in Philadelphia, which recently renewed with its replacement for CVS Health (NYSE:CVS) Caremark; and fabric manufacturer Phifer, which replaced its PBM, Prime Therapeutics, according to the Journal.
Foot Locker told the Journal that it has since hired a smaller PBM called Navitus Health Solutions, which maintains that it passes along 100% of the rebates it negotiates with drugmakers.
The Teamsters Health and Welfare Trust Fund of Philadelphia, meanwhile, said it hired Capital Rx in 2019 and has seen consistent savings on its drug spending since. A Teamster spokesperson told the Journal that Capital Rx had also agreed to pass through all of the rebates it negotiated.
Phifer also reported savings by hiring MedOne Pharmacy Benefits Solutions. As a result, it was able to keep its healthcare premiums flat for 2024, the Journal added.
