While Ohio patients suffer, middlemen make billions
By Joshua Cox
As a pharmacist, I have seen how Ohioans struggle with rising out-ofpocket costs for prescription drugs. Every day, I see the shock on the faces of patients confronted with costs in the hundreds and sometimes thousands of dollars for a single month’s supply of the medications they need to stay well. Faced with these high costs, patients frequently delay treatment or abandon therapy altogether.

Ohioans shouldn’t have to decide between paying for their prescribed medications versus other essentials like food and housing. 

And they largely wouldn’t have to if our elected officials cracked down on the drug supply chain middlemen who reap billions in profits while manipulating prices and jacking up patients’ out-of-pocket costs.

Foremost among those middlemen are the “pharmacy benefit managers”

— huge companies hired by health insurers to oversee prescription drug plans. These PBMs decide which drugs to include and exclude from plans, determine what level of co-pays or co-insurance beneficiaries owe, and negotiate with drug manufacturers for discounts and rebates that largely never make it into the hands of patients.

As a result, PBMs have accrued enormous power and they’re using it to make billions off the backs of patients, pharmacists, drug manufacturers, and even the insurers themselves.

How? Well, PBMs negotiate convoluted, secret rebate agreements with drug companies. Pharmacists, insurers and patients rarely know how much the PBMs are actually paying for any given medicine.

Rebates are thought to lop about 30% off the typical medicine’s nominal “list” price. But rebates of as much as 70% have been reported. Instead of passing rebates along to patients as savings, PBMs often pocket the difference and charge the rest of us full price.

A recent study found that PBM gross profit increased by 12% in two years, from $25 billion to $28 billion.

They derive much of their revenue from collecting a range of service fees and other charges from manufacturers, pharmacies, and supply chain entities.

Not even insurers — the companies that hired the PBMs — know exactly what the true net cost of drugs are. This system incentivizes PBMs to favor drugs with higher prices because they yield higher rebates.

This, along with a myriad of destructive PBM practices leads to higher drug costs for patients and the entire healthcare system.

For patients on low or fixed incomes, or those who need multiple prescriptions, the extra out-ofpocket spending can add up to thousands of dollars annually. For patients taking specialty medications, like those used to treat certain cancers, the cost can be thousands each month.

Fortunately, Ohio’s own Sen. Sherrod Brown has been a leading voice calling for prescription drug access and affordability. He cosponsored the C-THRU Act in 2019 which would require PBMs to share the savings with patients.

PBMs have been permitted to grow in power and manipulate the drug channel long enough. It’s time to pass meaningful and comprehensive reforms that will displant PBMs from the middle of our drug channel and make medications more affordable for all Buckeyes.

Joshua Cox is a board-certified Pharmacotherapy Specialist and is currently the Director of Pharmacy Services for Dayton Physicians Network.