In this ten minute video Eric explains how PBMs take the art of deception to new levels while claiming 100% of rebates are passed on to plan sponsors – the key is three letters: G-P-O
PBM #Deception on Rebate Pass-Through… The Key is 3 Letters: G-P-O.
Professor Ge Bai moderated a panel of Mark Cuban and Dr. Patrick Conway–the CEO of Optum–at Johns Hopkins University.
During the discussion Dr. Conway said that United Healthcare’s PBM–OptumRx–will pass through 100% of the rebate payments they receive from pharmaceutical manufactures on to their customers.
The other two of the ‘Big 3’ PBMs–CVS/Caremark and Cigna/Express Scripts–have made similar statements as well.
However, there is a catch.
The catch is that pharmaceutical manufactures make ADDITIONAL payments to Group Purchasing Organizations (GPOs) that are under that same parent company as the PBMs.
These additional payments are called ‘Administrative Fees’ and are not considered rebates by the PBMs… as such, these Administrative Fees are NOT passed through to customers.
A recent article by Hunterbrook Media reported that as part of the Federal Trade Commission (FTC) lawsuit against the ‘Big 3’ PBMs, it was revealed that the PBMs have DECREASED the Rebated payments that come from the pharmaceutical manufacturers (that are passed through to customers) and INCREASED the Administrative Fees (that are NOT passed through to customers).
From 2012 to 2023…
Rebates have decreased from 48% to 13%
Administrative Fees have increased from 5% to 22%
PBMs have shifted the pharmaceutical manufacturer money flow away from Rebates toward Administrative Fees so less is passed on to customers.