PBM Studies: Reliably Unreliable


By Devin Stone

The lobby for pharmacy benefit managers (PBMs) produced a “study” recently that once again fails to pass the smell test.  The study, authored by the Moran Company, follows a long line of literature funded by the Pharmaceutical Care Management Association (PCMA) that is at odds with objective, non-partisan studies commissioned by the Congressional Budget Office (CBO).  To review,

*In 2004 PriceWaterhouseCoopers (PwC) was commissioned by PCMA to evaluate the cost of requiring PBMs to disclose to their health insurance plan clients the PBMs’ contractual agreements with pharmaceutical manufacturers.  According to PwC, such transparency would cost $225 billion over 10 years for all PBM-managed health plans.  Although the study was commissioned before the implementation of the Medicare Part D prescription drug benefit, the CBO believes that the cost of such transparency for Medicare Part D “would very likely be less than $10 billion and could be significantly less.”  The most recent CBO scores of transparency provisions regarding PBMs are budget neutral in that they won’t cost anything. 

*In 2006 the Moran Company was commissioned to evaluate the costs for Medicare Part D of requiring prompt payment or reimbursement by PBMs to retail pharmacies and strengthening requirements for medication therapy management (MTM) programs.  Those policies would cost a combined $9.37 billion over 10 years, the Moran Company predicted.  This greatly exceeds the estimate performed by the CBO in June of 2008, which placed the cost for prompt pay at $700 million over 10 years.  Although the CBO has not scored the cost (or, more likely, net savings) from strengthening MTM programs under Medicare Part D, it is important to note that peer-reviewed studies in academic journals demonstrate that MTM programs decrease prescription drug costs.

*In 2007 CRA International was commissioned by PCMA to evaluate the cost of granting an antitrust exemption to independent community pharmacies when bargaining with PBMs.  According to CRA International, such an exemption would increase costs under Medicare Part D by $6.4 billion over five years.  The CBO took a much more comprehensive look by evaluating the impact on both Medicare Part D and the Federal Employee Health Benefits Program, and estimated for a 10– year window.  Even with this more encompassing approach, the CBO estimated the cost of an antitrust exemption to be $640 million over 10 years, which is a tiny fraction of what was estimated by CRA International. 

*In 2008 PwC was commissioned to evaluate the cost of prompt pay requirements for Medicare Part D.  PwC provided a lower estimate than the Moran Company, but still estimated the cost to Medicare to be between $3.3 billion and $7.7 billion over 10 years.  This is substantially more than the CBO score cited previously of $700 million over 10 years.

The obvious lesson is to think twice when reading PBM-funded research.

0 Responses to “PBM Studies: Reliably Unreliable”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Search by Categories


%d bloggers like this: