In
late
September,
the
Federal
Trade
Commission
filed
an
administrative
complaint
against
the
three
largest
pharmacy
benefit
managers,
alleging
that
these
third-party
service
providers
artificially
inflated
the
price
of
insulin.
They
did
so
by
deliberately
refusing
to
bring
lower-priced
insulin
that
was
already
available
to
patients
because
of
a
“perverse
drug
rebate”
program,
the
FTC
said.
In
other
words,
pharmacy
benefit
managers
collect
rebates
and
fees
based
on
a
percentage
of
the
list
price
of
the
drug
from
drugmakers,
use
these
rebates
to
convince
health
plans
and
employers
to
add
these
drugs
to
formularies
and
then
manage
their
pharmacy
benefit
on
behalf
of
employees.
Since
the
PBMs’
compensation
is
tied
to
list
price
of
the
drug,
they
appear
to
have
no
incentive
to
bring
lower
cost
drugs
to
the
market.
This
becomes
a
financial
burden
for
patients
as
well.
In
fact,
this
practice
appears
to
be
tied
to
more
than
just
insulin.
Paul
Markovich,
CEO
of
Blue
Shield
of
California,
experienced
the
same
issue
when
he
tried
to
bring
a
lower-priced
prostate
cancer
drug
and
faced
obstacles
from
the
health
plan’s
PBM
–
CVS
Caremark.
Ultimately,
he
restructured
how
Blue
Shield
of
California
transacts
with
its
PBM
bringing
in
other
PBM
and
pharmacy
players.
See
how
Markovich
shared
this
story
at
a
MedCity
News
event
in
early
spring,
months
before
FTC
took
action: