https://mailchi.mp/169732fa4667/the-weekly-gist-november-17-2023?e=d1e747d2d8

This week, Express Scripts, the nation’s second-largest pharmacy benefit manager (PBM), which is owned by health insurer Cigna, announced a new pricing model.

It is giving employers and health plans the option to pay pharmacies up to 15 percent over acquisition costs, plus a dispensing fee, for covered drugs. This payment structure was popularized by the Mark Cuban Cost Plus Drugs Company, founded by the billionaire businessman in reaction to the opaque pricing and complicated discounts and rebates common among PBMs.

While Cigna is not promising that this new pricing model will result in lower prices, it says it will improve transparency and should benefit retail pharmacies, who will split the markup with Express Scripts.

Cigna projects that only some employers will lower their healthcare spending through the cost-plus model, and that patient cost-sharing should be similar under both approaches. 

The Gist: Between disruptive competitors like Cuban’s venture and increasing scrutiny from Congress, PBMs are facing new pressures to improve transparency and account for their role in rising drug costs. 

This move by Cigna is an attempt to address at least one of those concerns, possibly intended to preempt regulatory and legislative action. 

After years of complaints surrounding their business practices, it appears that the Congressional tide may be turning toward PBM industry reform. However, patients—who by and large are unaware of what PBMs are or do—won’t be satisfied till they see their out-of-pocket prescription drug costs go down. 

Next up on this front: seeing which provisions targeting PBMs, many which have bipartisan support, make it into the Senate’s broad healthcare legislation planned for the end of this year, and in what form that bill ultimately passes.