New York Times Puts PBMs Under Investigative Spotlight


The newspaper’s investigation, which included interviewing 300 peole, found that pharmacy benefit manager often act in their own financial interest by overcharging employers and government programs.

Pharmacy benefit managers (PBM) used to operate quietly behind the scenes. But as companies consolidated and became more powerful, they have come under all kinds of government and legal scrutiny.

Today that scrutiny became even more intense as the New York Times published the results of its investigation of the industry that involved the paper’s reporters interviewing more than 300 people, including PBM employees, patients, physicians, pharmacists, and reviewing court documents and patient records. (The story is behind a paywall.)

The newspaper found that PBMs often act in their own financial interest by overcharging employers and government programs, underpaying pharmacies, not disclosing fees and rebates and delaying access to medications. “The Opaque Industry Secretly Inflating Prices for Prescription Drugs,” is the headline. Although the PBM has been covered in the trade press and by regional newspapers such as The Columbus Dispatch, the Times’ investigation stands out as the most prominent by a national news organization.

“The main lobbying group for the PBMs says that in 2022 they saved their clients and patients $286 billion,” the Times’ article said. “But those savings appear to be largely a mirage, a product of a system where prices have been artificially inflated so that major PBMs and drug companies can boost their profits while taking credit for reducing prices.”

By 3:30 p.m. this afternoon there were more than 1,000 comments on the story on the newspaper’s website.

JC Scott

JC Scott

J.C. Scott, the president and CEO of the Pharmaceutical Care Management Association (PCMA), the industry’s trade group, said in a prepared statement that the Times’ article is “biased and incomplete. Today’s article from The New York Times fundamentally misconstrues the critical value of pharmacy benefit managers (PBMs).

"It is clear this article was designed from the beginning to fit predetermined conclusions about the PBM industry and advance an agenda that shares common cause with the pharmaceutical industry. The article lacks data and instead relies on a handful of anecdotes to make broad assertions,” Scott said.

In a LinkedIn post, David Joyner, executive vice president of CVS Health and president of CVS Caremark, said the Times’ article was sensationalized and old news. Joyner had been interviewed for the story.

In the post, he said CVS Caremark passed more than 99% of rebates to clients in 2022 and 2023. “Where competition exists, rebates are an effective way of lowering the cost of high-priced drugs. However, it is those drugs that have no competition and are subject to arbitrary increases in list prices that represent 70% of our drug spending,” he wrote.

Joyner's post caused a stir, with many comments about CVS Caremark’s lack of transparency and steering patients to their own pharmacies. One commenter even suggested Joyner was gaslighting the public about what the PBM does.

Joe Shields

Joe Shields

Joe Shields, managing direct of Transparency-Rx, a trade group of smaller PBMs that they say want to reform the industry, praised the newspaper’s reporting and said it justified his groups push for legislation that would require more reporting and ban certain PBM business practices.

“As the Times’ investigation concludes, the Big 3 PBMs operate in opaque, risky, and increasingly questionable ways to the detriment of local employers and patients they are supposed to serve,” he said. “This article exposes many aspects of a broken health care system, a vice-grip on a competitive market, and further evidence that a continued risky approach based on spread-pricing and market consolidation by mega-insurers and big PBMs is simply too costly for American working families and job-creators.”

The Times investigation comes after the Federal Trade Commission launched an inquiry oif the industry two years ago that some lawmakers say is taking too long to include. Meanwhile, the House passed a bill last year by a wide margin that would impose some reforms on the industry, although the industry’s critics said it didn’t go far enough. Meanwhile, several PBM reform bills have been introduced in the Senate.

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