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PBMs—The Middlemen Shaping Treatments and Costs
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Released: August 19, 2024

John Marshall
John Marshall, MD
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PBMS: THE POWERFUL MIDDLEMEN
John Marshall, MD: This is going to kick off one in a series of the middlemen in our world. We are going to talk about CROs, clinical research organizations, certainly going to talk about electronic medical records. They're sort of our data middlemen. But for this episode, we're going to talk about pharmacy benefit managers.  

Now benefit. I love that word. I get benefits for my job here at the university. It's in my benefits package. What these pharmacy benefit managers are taking advantage of is that that's money that I don't really feel. I don't really see. It's going to pay for things and they're getting, of course, their cut. So, we're going to try and drill down on this.  

Now, as we usually do, we did a pretty extensive literature run, and there are some papers here and there. There's a JCO paper. It was a little while ago. Lancet had one, but nothing really recent about the impact of PBMs on our medical world. 

So, what we did, because we went out and found a couple of really good experts that we're going to be interviewing.  

But let me talk a little bit about just these PBMs and the impact that they are having. So, for example, a couple of or three PBMs or at least these are now big companies that are of course vertically integrated, but they've gotten so big that they're thinking about buying practices. 

And one of the practices that's out there being considered is Florida Cancer Specialists and Research Institute. Now, I know a lot of the people at Florida Cancer. It's a great health care system. The cancer community is outstanding, McKesson, Cencora, and Cardinal Health, not commenting, but there are suggestions that they're out trying to buy this organization, and they're worth about 3 billion out there in the open marketplace. And then what you could see is you've not only got, you know, pharmacies and hospitals and all of that. But now you own the physicians as well in this. So that's going to be an interesting thing to watch out for is that.  

But let me show you another sort of side mark of this. And this is this thing that I recently heard about called Lilly Direct. Now, Eli Lilly, right? They are solid company. They've been doing a lot. They've got a lot of innovative drugs that are out there. But they had something called Lilly Direct, so I went on to their website. You should do this too. And what it is, is a website for patients who might not have a doctor, or whose doctor might not be willing to prescribe a medicine at Lilly sells. There's some weight loss drugs in there, by the way. And you can click and it says, do you have a doctor or don't you? And if you don't, they give you one and you have a visit, I assume, with that doctor. But then Lilly mails you the drug. There is no in between pharmacy. So now you're even being sidelined as a physician to where Lilly will be providing the physician through some mechanism and then will be mailing you the drug directly to remove this middleman. A different kind of strategy to cut out that PBM and now your own pharmacy or your local pharmacy from that pathway as well. It'll be just coming direct from Lilly.  

Now the big ones, of course, are CVS Caremark, Express Scripts, and OptumRx, and those three companies have nearly 80 percent of the market share. And of course, this is a subject of a recent House Oversight Committee review to look at that and see if there is any, you know, is that clean? Is that what are the rules in there? Are we getting the best for our buck there?  

On the other end of the country, Blue Shield of California actually kicks out CVS Caremark as a PBM, and they basically are starting up their own new pharmacy model. 

So, there's a lot of big, moving parts in this space. Some of you out there are familiar with PBMs and all of this world, I was not when I started to get into this world a little bit more in my roles. And so, there's a lot to learn a lot to know. And I do think we represent an important voice in this process, not just victims of it, but part of it that we can influence some change. 

I encourage you to listen to it. A couple of interviews that we did with people who are really smart about this subject, so you too can be a little smarter about it and maybe have some influence on this in your own way.