Why Is Novolog On Your Formulary When Something Cheaper Isn’t?

By Scott Fuqua on Linkedin

(Experienced Healthcare Professional with nearly 25 years in the industry. RBR, Medical Bill Review, Cost Containment)

If PBMs could lower the cost, why are they not doing so? Just like the PPO Network middle men, the traditional PBM model is an absolute PROVEN FAILURE.

PBMs have been around for a very long time. What has happened to the price of drugs for employers since over that time period?! They don’t want to lower costs. They are not incented to do so.

PBM’s decisions are made with only one thing in mind – how it benefits THEM and increases their margins. One simple example: Novolog is a brand name insulin. It is hundreds of dollars. The generic is literally the EXACT same thing, just with a different label and the price is about 80%-90% less. Novolog is on the formulary. The generic is NOT. Why? REBATES! And not because they are going to the employer, but most of the rebates are staying with the PBM.

So instead, put Novolog on the formulary, provide it to employees for a static Brand Name Copay of $30 (so now the member could care less about the total cost), and rake in the rebate dollars to fatten the PBMs margin for doing nothing.