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Pharmacy Benefit Managers (PBMs) play a critical role in how medications are priced and distributed to patients. Yet, many employers—who rely on PBMs to manage their employees' drug benefits—are unaware of how much money PBMs actually save them. A recent survey by KFF revealed significant gaps in transparency, leaving many companies in the dark about where their money is going.
The Transparency Gap
According to KFF's survey, 37% of employers don’t know how much of the rebates negotiated by PBMs are returned to them. Only 19% of companies said they receive most of the savings, while 27% reported receiving only some of the rebates. Despite PBM leaders claiming that 95% to 98% of rebates go back to employers, many organizations find that their actual savings are unclear.
PBMs claim to save employers and patients money by negotiating discounts with drugmakers. However, the complexity of PBM pricing leaves many employers feeling underequipped to understand how these savings are calculated.
Rising Costs and Inconsistent Pricing
The lack of transparency from PBMs also contributes to rising drug costs. For instance, in one Medicaid study, PBMs charged anywhere from $2,000 to $8,000 for a month’s supply of the cancer drug imatinib, which can be purchased generically for as little as $30. This inconsistency highlights how pricing structures can vary dramatically, even for the same medication.
Beyond this, the KFF survey found that premiums for employer-sponsored health coverage are also increasing. The average premium for single coverage rose from $7,739 in 2021 to $8,951 in 2023, while family coverage increased from $22,221 to $25,572. With premiums and drug costs climbing, employers are increasingly questioning whether PBMs are delivering on their promises of savings.
The Need for Transparency
Employers are increasingly frustrated with the lack of insight into how their drug benefits are managed. They’re calling for more transparency and clearer contracts, especially as they struggle to cover the cost of increasingly expensive medications, such as new weight loss drugs like Wegovy, which can cost over $2,000 a month. Yet, only 18% of companies cover these drugs, with larger organizations being the most likely to offer coverage.
A Simpler Solution
At Forest Park Pharmacy, we believe that healthcare should be straightforward. We focus on transparency—no middlemen, no hidden costs. As employers and patients demand more accountability in their drug plans, we’re committed to providing affordable, clear pricing and personalized service to help you take control of your health.
In a landscape where drug costs and rebates are often shrouded in mystery, Forest Park Pharmacy is here to bring clarity and savings to our customers.
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