What is a PBM, and why it matters at your pharmacy counter

By Brenda Stewart, Publisher Laurens County Buzz

Most South Carolinians have never heard of a pharmacy benefit manager. State Rep. Heath Sessions admitted at a recent roundtable at Sadler Hughes Apothecary in Clinton that he hadn’t either, until about three years ago. Yet PBMs play a part in nearly every prescription filled in the state.

What PBMs do

A pharmacy benefit manager is a company hired by insurers, employers and government health plans to run their prescription drug coverage. PBMs decide which drugs are covered, how much a patient pays at the counter, how much the pharmacy is paid and which pharmacies a patient is allowed to use.

The three largest PBMs, Express Scripts, CVS Caremark and Optum Rx, handle about 80% of prescriptions billed to insurers, according to Brian Clark, CEO of the South Carolina Pharmacy Association. Each is part of a Fortune 15 company, and each is tied to an insurer and its own mail-order or retail pharmacies.

“That vertical integration, where you have a payer all the way down to a retailer, that’s the definition of a monopoly,” Sessions said.

Where the money goes

Patients often see only their copay, which can be little or nothing. Behind the counter, the numbers can look very different.

PBMs frequently pay a pharmacy less for a drug than they charge the health plan and keep the difference, a practice called spread pricing. Some reimbursements fall below what the pharmacy paid for the medication.

“Walter’s got a drug that costs him, let’s say, $2, but the reimbursement rate is a dollar,” Sessions said. “In any other business, they wouldn’t sell that product. Our pharmacies don’t have that option, because if they don’t, they’re going to be out of network.”

Because one insurer covers a large majority of patients in much of South Carolina, an independent pharmacy cannot afford to walk away from those contracts, even when they lose money.

Steered to the mailbox

PBMs and health systems can also steer patients away from their local pharmacy, often toward mail order.

Sessions said his son, Asher, who has seizures, takes a specialty medication called Briviact. When the family’s insurance changed PBMs, they were told the drug would be mailed to them, even though their local pharmacy in Rock Hill was two blocks away.

Retired Air Force veteran Larry Hall said mail-order refills through Express Scripts used to arrive in pieces, two prescriptions one week and one the next. For years he drove a 150-mile round trip to Fort Jackson to get everything filled at once before switching to Sadler Hughes.

Why it matters in rural communities

In much of rural South Carolina, the local pharmacist is the most accessible health care professional in town. No appointment is needed, and the pharmacist often knows a patient’s full medication list and can catch a dangerous drug interaction before it happens.

When an independent pharmacy closes, a town can become a pharmacy desert. Residents may have to drive much farther for medication or delay treatment, which raises the risk of missed doses, worsening illness and higher costs.

Hometown pharmacies also step in when others cannot. Sadler Hughes reopened two hours after the recent hurricane and served as a food bank, bank, charging station and health resource while larger chains stayed closed for days. During the COVID-19 pandemic, the pharmacy was called on to help fill prescriptions as far away as Greenwood when large chains could not keep up.

Patients described a level of care that is hard to replace. Hall recalled Hughes coming to his home to give his wife a flu shot when she could not get out. Sims said that after the pandemic, Sadler Hughes had cold medicine when larger stores did not, and that a pharmacist once personally made sure his mother got a missed medication on a weekend.

“They’ll never be too busy to come out and wait on you,” Sims said.

What patients can do

Know your PBM. The name is usually printed on your insurance card or prescription card.

Ask before you switch. If your plan says a drug must come by mail, ask whether an exception is available to fill it at your local pharmacy.

Speak up at the doctor’s office. Ask that your preferred pharmacy be listed as your pharmacy of record and confirm it each time a new prescription is sent.

Contact your legislators. Pharmacy advocates are urging patients to ask their state senator and representative to support stronger PBM protections and to give the S.C. Department of Insurance clear authority to enforce them. A joint House and Senate committee on PBMs is expected to begin work after the election.