Garden State Times

The head of a New Jersey health care reform group said that pharmacy benefit managers (PBMs) have “capitalized on an opaque system” and are working to “keep the true costs of medicine hidden from consumers.”

“It’s no secret that determining healthcare costs is complicated and confusing,” wrote Jeanette Hoffman, executive director of Patients Come First - New Jersey, in a NJ.com op-ed. “However, patients should be aware of the financial tools available to them so they are able to make the best decisions for their health and financial circumstances.”

“Unfortunately, ‘middlemen’ in the drug supply chain, known as Pharmacy Benefit Managers, have capitalized on an opaque system and instead work to keep the true costs of medicine hidden from consumers,” wrote Hoffman.

A PBM is a third-party administrator of prescription drug programs for health insurers, self-insured employers, and government agencies. PBMs negotiate with drug manufacturers to secure discounts and rebates on medications, manage pharmacy networks, and process prescription drug claims. PBMs also provide services such as medication therapy management and mail-order pharmacy services.

“There are around 70 PBMs in the U.S.,” reported NPR in July 2023. “Through mergers, three of them — CVS Caremark, Optum Rx, and Express Scripts — have come to control 80% of the prescription drug market, and each brings in tens of billions of dollars in revenue annually.”

Hoffman wrote that “a lack of transparency and accountability mechanisms” within the pricing systems of these PBMs prevent drug manufacturer discounts and rebates from getting shared with patients. 

“Consumers are not told how much these middlemen are receiving in rebates, and, therefore, it becomes much more difficult for patients to compare competing drug brands based on price,” she wrote.

In February, 39 state attorneys general sent a letter to Congressional leadership saying a “small number of PBMs hold significant market power and are reaping abundant profits at the expense of the patients, employers, and government payors the PBMs are supposed to help.”

The letter referenced three pending bills in Congress, The DRUG Act (S1542/HR6283), Protecting Patients Against PBM Abuses Act (HR2880) and The Lower Costs, More Transparency Act (HR5378), which the attorneys general wrote “would be an important first step toward reforming” PBMs.

Hoffman, announced as executive director of PCF-NJ in March, previously worked as vice president of government affairs and communications for The Commerce and Industry Association of New Jersey. She also worked as an aide to former Gov. Christine Todd Whitman (R-N.J.).