The Hidden Force Shaping Drug Prices

Every time you get a prescription drug, you’re dealing with a middleman you’ve probably never heard of — one who has had a hand in how much your drug costs. The same middleman decides which drugs are covered by your insurance, and even which medications are prescribed by your doctor. Pharmacy Benefit Managers (PBMs) are powerful and important companies that have become connectors between pharma, insurance companies, pharmacies, and consumers. But many critics say they’ve become too powerful, and are driving up prescription drug costs for all of us. On this episode, we explore their role, and how they affect patient care, drug prices, and our health care choices. We hear stories about one cancer patient’s battle to get her medication, why independent pharmacists say PBMs are putting them out of business, and what a recent Supreme Court ruling means for reining in PBMs.

Also heard on this week’s episode:

• Over the past few years, pharmacy benefit managers have emerged as powerful players in the world of health care — so why is it that so few people have heard of them? Liz Tung reports on why PBMs are the “Keyser Soze” of American health care.
• In 2018, Norma Smith was diagnosed with stage 3 cancer. Her doctor prescribed a drug that would save her life, but then a pharmacy benefit manager denied her medication.
• In December of 2020, the Supreme Court handed down its decision in the case of Rutledge v. Pharmaceutical Care Management Association (PCMA) — one that could have far-reaching consequences for PBMs. We talk about the surprising decision with Dan Gorenstein, host of the health policy podcast, “Tradeoffs.”

Read the full episode transcript.