Radar on Drug Benefits

Blue Shield of California has been making moves to reduce drug costs for its members, including dropping the traditional PBM model and dividing the functions between five different vendors. Now, the insurer has struck a deal to offer a no-cost Humira biosimilar to its 4.8 million members. 

Evio Pharmacy Solutions — a startup owned by several Blues plans, including Blue Shield — negotiated with drug manufacturer Fresenius Kabi to purchase the biosimilar at $525 per monthly dose, compared to the $2,100 market-rate Humira dose. Beginning in January 2025, commercial plan members will be able to obtain the medication for $0. Humira is Blue Shield’s biggest drug expenditure, processing 40,000 prescriptions annually, according to the insurer.  

When the Federal Trade Commission (FTC) officially accused the three largest PBMs of artificially inflating insulin prices, it marked the latest move in what has become a protracted effort by federal regulators to rein in the industry’s business practices.  

However, experts who spoke to AIS Health say it’s unclear how much of an impact the FTC-driven litigation will have on the market — or whether the complaint itself will survive once the White House gains a new occupant. 

Even if the FTC’s lawsuit is “robustly successful,” says Joe Shields, managing director of Transparency-Rx, it is focused on only one drug category. “That’s not meant as a criticism, but the reality is, what that means to the broader aspects of formulary or pharmacy benefit management, it’s an open-ended question,” adds Shields, whose organization of smaller PBMs is pushing for industry reform.  

Employers and health plans are less satisfied with the “Big Three” PBMs — CVS Health Corp.’s Caremark, UnitedHealth Group’s Optum Rx and The Cigna Group’s Express Scripts — compared with their smaller peers in the pharmacy benefits industry, according to a Pharmaceutical Strategies Group (PSG) survey published this month. While the Big Three have taken steps in recent months to offer more transparent models, Michael Lonergan, PSG’s president, tells AIS Health those companies have faced numerous challenges to their businesses that have made them more unpopular among clients. 

For instance, he mentions the Federal Trade Commission (FTC) lawsuit filed on Sept. 20 against the Big Three PBMs and their affiliated group purchasing organizations (GPOs), accusing them of inflating the list price of insulin medications and restricting access to those drugs. The FTC also issued an interim report in July that was highly critical of the Big Three, which together account for about 80% of the U.S. prescription drug claim processing market.  

Overall satisfaction with PBMs is at a decade-long low this year, according to the 2024 Pharmacy Benefit Manager Customer Satisfaction Report, published by Pharmaceutical Strategies Group, an EPIC company. The report also showed that payers were seeking improvements in the PBM industry and were willing to be part of the disruptive change.

The report is based on responses from 248 benefits leaders at employers, unions/Taft-Hartley plans, health plans, and health systems, and it was conducted from May 10, 2024, through June 7, 2024.