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A New York Times investigation published on December 17 found that pharmacy benefit managers (PBMs) played a hidden—but important—role in the opioid crisis.
The outlet said it reviewed documents including contracts, emails, and financial data, and learned that in exchange for higher rebates, PBMs restrained formularies—the list of drugs insurance will cover—from enacting safeguards like strict quantity limits.
While PBMs began implementing more opioid restrictions under federal pressure in 2017, this came after years of lucrative rebates for the highly addictive and dangerous drugs.
Secret strategy. In 2012, drugmaker Purdue Pharma paid PBMs about $400 million a year in rebates, the NYT found. An internal presentation obtained by the NYT allegedly showed Purdue instructing employees to “offer rebates to remove payer restriction.”
In statements, PBMs defended themselves to the NYT, arguing they offered public and private insurers and programs like Medicaid the option to restrict opioids. But the intermediaries reportedly also sometimes pushed those clients to go easy on opioid manufacturers, the NYT said.
In 2003, for instance, UnitedHealthcare was planning a monthly cap on Purdue’s drug OxyContin. But an executive from PBM Merck-Medco (which later became part of Cigna’s PBM Express Scripts) warned them that could cause a “potential loss of rebates,” according to the Times.
“That information convinced the UHG [UnitedHealth Group] team to change,” the executive wrote to Purdue in a communication obtained by the NYT.
UnitedHealthcare still issued a cap—124 pills per person per month—but that cap was more than double its initial proposal of 60.
Bad time to be a PBM. This investigation follows lawsuits filed over the last few months from Michigan, Kentucky, Mississippi, and other states against PBMs for their roles in exacerbating the opioid crisis by reducing safeguards.
Beyond that, the Federal Trade Commission has sued the country’s top three PBMs—CVS Health’s Caremark, Express Scripts, and UnitedHealth Group’s Optum Rx—alleging they artificially inflated insulin prices.