As Colorado moves into the odd, uncertain era of getting used to the COVID-19 pandemic lurking around while learning to live with the seemingly omnipresent consequences of the pandemic’s darkest days, cracks in our healthcare system have become increasingly exposed. Across the state and nation, almost everybody has either faced medical scares themselves or seen their loved ones faced with the uncertainty of contracting COVID. For those who contracted it, it was often a life-or-death situation. Issues like surprise billing, junk insurance plans, exorbitant out-of-pocket costs and challenging billing practices from hospitals and insurers have become prominent and more commonly spoken about.

The issue of Pharmacy Benefit Managers (PBMs) is one that seems to get continuously overlooked, even for those who work in or know the American health care system well. A PBM is a company that manages prescription benefits for large companies, Medicare Part D Plans, insurers and other large-scale payers. PBMs are typically the main party responsible for determining which drugs are available to consumers, and at what cost. Three PBMs dominate the current market: OptumRx, CVS Caremark and Express Scripts.

PBM companies have the power to negotiate wide-scale rebates on prescription medicines – this is how they make their money. However, these large rebates are almost never passed on to consumers to lower out-of-pocket medicine costs. PBMs are one of the least transparent, least regulated and least understood aspects of the health care delivery system. According to research conducted by the Kaiser Family Foundation, PBMs currently manage an estimated 71% of the volume of prescription drugs dispensed through retail pharmacies that are covered by private third-party payers.

The primary function of a PBM was initially to create networks and process pharmaceutical claims; however, these entities have exploited the lack of transparency and oversight, subsequently creating conflicts of interest which have significantly distorted competition, reduced choices for consumers and ultimately increased the out-of-pocket cost of prescription drugs.

This convoluted practice is not well-received by the general public, as shown in extensive national and Colorado-specific polling conducted by Consumers for Quality Care, a nationwide coalition whose mission is to provide a voice for consumers to tell their stories and demonstrate to lawmakers the imperative that is quality care. The poll, conducted over the  summer, put forward numerous proposed policy solutions for high health care costs, one of which was to “require health insurers and pharmacy benefit managers to pass the rebates or discounts they receive from drug companies on to patients.” That idea received 73% approval nationwide and 74% approval in Colorado.

The passage of the historic Inflation Reduction Act (IRA) will provide some help to Medicare recipients in terms of lowering out-of-pocket costs, including through the implementation of an out-of-pocket cap in Medicare Part D, and a $35 cap on insulin for Medicare beneficiaries. But more is needed to be done to ensure benefits, including rebates from PBMs passed to all consumers.

In a state with nearly 80% of the population covered by something other than Medicare, more is needed. In Adams County, where I am a county commissioner, the numbers look similar to the statewide situation: as of 2020, 51.6% of Adams County residents were covered by employer-sponsored coverage, 19.8% on Medicaid, 7.6% on Medicare and 10.3% uninsured. Policymakers must move toward requiring insurers and PBMs to pass the rebates and discounts they receive from drug companies onto patients.

Beyond that, state and federal policymakers must pay more attention to the widespread financial detriment that PBMs cause for working families and average Americans who are simply trying to access the prescriptions they need to keep them healthy. If we continue to allow PBMs to exploit the lack of transparency required of them, there is little to no chance that out-of-pocket prescription drug costs will be decreasing anytime soon.

Emma Pinter is an Adams County Commissioner. She was elected to Westminster City Council in 2013 and was selected as the “Woman of Metro North” in 2018 by the Metro North Chamber and the Colorado Women’s Chamber.