PBMs: The Savings Generator

05/20/20 • 14 min

Host JC Scott speaks with Mark Newsom, the principal and founder at Health Evaluations LLC, on the core role of Pharmacy Benefit Managers (PBMs). Newsom goes through the process PBMs take to get us, the consumers, the most effective medications for the lowest premiums. He also discusses PBMs and their role in conjunction with the other players in the industry. Some key points from the conversation include:

Why PBMs Exist And How Savings Are Generated For The Consumers: Newsom accentuates how PBMs’ role in doing the formulary is one of the biggest steps in reducing costs of prescriptions while also increasing the safety of the consumer. He also focuses on how negotiations between manufacturers and pharmacies is a key area for lowering prices. These savings from each individual step help consumers save 40-50% on their annual costs in the form of lower premiums.

A Breakdown Of Where The Money Flows And The Thin Line Of Profit PBMs Tread On: JC Scott breaks down the purchasing dollar and where it goes within the pharmaceutical industry and questions Newsom about the low profit margins of PBMs. Newsom explains how much money is saved for every dollar spent on PBMs, and how even a low percentage of the total money involving pharmaceutical drugs goes a long way when there are billions of prescriptions every year.

What Actions Undermine The Work Of PBMs: Newsom discusses how everyone wanting everything hurts the effectiveness of PBMs working to get people quality prescriptions at lower costs. With individual preferences and politics getting involved, PBMs must work around these obstacles in order to provide the best service they can.

You can subscribe to The Pharmacy Benefit on Spotify, Google Podcasts, Apple Podcasts, and all other major platforms.

You can subscribe to The Pharmacy Benefit on Spotify, Google Podcasts, Apple Podcasts, and all other major platforms.

Previous Episode

Introducing the Pharmacy Benefit Podcast

Welcome to The Pharmacy Benefit! Hosted by JC Scott, President and CEO of the Pharmaceutical Care Management Association, The Pharmacy Benefit talks about the latest trends, public policy developments, and political challenges impacting drug pricing and healthcare.

You'll hear the nation's top thought leaders, policy experts, and political analysts on a wide variety of topics from insulin affordability to advancements in gene therapy, biologics, other cutting edge therapies.

The Pharmacy Benefit will also analyze the latest news from inside the industry and give you an educated perspective on where things stand and where they're headed.
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Next Episode

How PBMs Are Helping Patients During COVID-19

Host JC Scott speaks with Tim Wentworth, the president of Cigna Express Scripts and Cigna Services, about how Cigna--along with the entire pharmaceutical industry--are addressing the COVID-19 pandemic. Wentworth is optimistic that the ingenuity of the US healthcare system can combat COVID-19 and that current industry-wide collaborations can survive beyond the current pandemic. Some key points from the conversation include:

Cigna Continues to Put the Patient First During COVID-19: Since the start of the outbreak in March, Cigna has focused on the safety of its employees, customers, and most of all, patients. Wentworth emphasizes that Cigna is dynamically managing the supply chain and acting flexibly and nimbly to ensure pharmaceutical access to the clients. It is also working with federal and state officials to ensure a balanced pharmaceutical policy.

The Pharmaceutical Industry is Collaborating To Address the Current Health Crisis: Wentworth is optimistic about the cooperation between industry members to ensure the patients continue to receive care. For example, Cigna is now collaborating with retail pharmacies to put in place a new program with deep discounts for uninsured patients. The entire industry is working to ensure that those suffering from healthcare and economic fallouts from COVID-19 are not forgotten. He believes that such collaboration can continue in the future.

US Health Sector Innovation Is the Best Bet Against COVID-19: US biotechnology and pharmaceutical companies are working in an unprecedented manner to find solutions to COVID-19. Wentworth believes that Cigna, and the entire industry, will find a way to ensure access to COVID-19 for its patients. He stresses that it is a public health decision more than it is a commercial decision.

You can subscribe to The Pharmacy Benefit on Spotify, Google Podcasts, Apple Podcasts, and all other major platforms.