Supreme Court agreed to hear a case earlier this year on whether states can regulate prescription drug reimbursement to curb the practice. The Trump administration introduced then rolled back a sweeping rule that would have banned drugmaker rebates to PBMs in Medicare and Medicaid last year. PBMs have been attracting the ire of state and federal regulators in recent years over their practices, especially spread pricing, where a PBM reimburses pharmacies one price for a drug but charges the plan another, resulting in profits. and to what extent contracting entities are shifting discounts from the rebate profit pool 99% of which flows to clients to fee pools that may be retained by the PBM." researchers wrote. "The key questions here are to what extent the purchasing entities are truly creating incremental value for manufacturers and customers. "While long term value generation is dependent on expanding the Pharmacy Services segment's reach, the near-term value proposition for CVS may be as simple as capturing its fair share of the GPO admin fees and other data or compliance related fees similar to what have been able to establish with Ascent," the note from Nephron Research, a healthcare investment researcher, reads. PBMs, middlemen that purchase drugs in bulk from manufacturers to negotiate discounts for payers, employers and consumers, have faced criticism for jacking up prices, though they maintain their job is crucial to make pricey pharmaceuticals more affordable.Ĭreating an internal GPO could be a savvy move for CVS to streamline administrative costs while potentially expanding the reach of its PBM, Caremark, though it does raise concerns it could result in trickle down costs for consumers by having another intermediary in the already complex drug channel.
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