Pharmacy Expert Weighs In on the Transition to In-House PBMs

We asked an industry insider who is about to serve as in expert witness in a case involving a PBM to give us his take on Anthem’s move away from Express Scripts. He wished to remain anonymous given the sensitive nature of the discussions.

He said he believes that payers who bring PBMs in house want “the ability to manipulate data to achieve improved population health, [and] would always want access to the most data, so this trend is no surprise.”

The expert witness noted that Anthem may be moving their PBM in-house due to a strained relationship with third-party PBMs.

“They can dress it up any way they like, but they just don’t trust Express Scripts,” he said. “PBMs are too negative—they tend to bully their vendors, and I think this bleeds over to its customers too.”

However, he explained that Anthem’s decision to partner with CVS may also be problematic for the payer.

“Since the dawn of managed care, plans have tried to create a role for the retail pharmacist in health care organizations,” he said. “Disease management, medication therapy management, ‘brown bag’ inspections—it’s all been tried. But the retail pharmacist is too busy operating a retail pharmacy. Filling so many prescriptions in a day doesn’t leave much time for managing a population.”

As for what the future holds, he explained that the PBM function will remain, but internal to the payer.

“The next step will be to use AI [artificial intelligence] to spot trends in patient behavior to improve population health,” he said. “This is the future of health care delivery and management.”

The expert witness also stated that Express Scripts, and other PBMs could be facing extinction as health care evolves.

“[Large PBMs are] facing an existential threat,” he said. “They have a seriously bad reputation among plan and employer decision makers, and are facing real questions about their honesty. The PBM business has very tight margins, and the advantages that CVS-Aetna represent hurts Express Scripts.”

When asked how Amazon’s entry into the health care space my compound this issue, he stated that “They would be wise to buy a PBM in order to get the clinical talent and the licensing necessary in all states to serve as a health care provider, which is what a PBM is when they address clinical issues.”