Profits Over Patient Care: How PBMs Work Against the Patient by Julie Baak

From the Broomstick of Julie Baak

Pharmacy Benefit Managers (PBM) are the middlemen that do none of the work and make most of the money.

Fun Fact: PBMs have their MBAs tell MDs which drugs (formulary) they can prescribe based on how much money the PBM can make instead of clinical efficiency and the welfare of the patient(s). These ‘formularies’ are created based on drug manufacturers paying bribes and kickbacks in the forms of rebates, fees, and/or discounts in exchange for inclusion on this formulary list.

(Need a refresher on PBM Transparency? Click here. )

PBMs also get to ‘take back’ even more money (also known as ‘claw backs’) from independent pharmacies in Direct and Indirect Remuneration (DIR fees) and saddle independent physician infusion centers with admin burdens that require more staff. 

Fun Fact Example: Think of a fox ‘guarding’ a hen house and you now understand the 3 PBMs (OptumRX, CVS and Express Scripts).

In a Pew Research study from March 2019, drug manufactures paid PBMs $10.2 Billion in rebates, fees, kickbacks, and/or bribes in 2012. (Yep – that is Billion with a ‘B’.) Then 4 years later in 2016, the drug manufactures paid PBMs $22.4 Billion. (Yep – Billions with another ‘B’.) Wow!  If you are wondering, ‘How do I get in on this?’, well, you can’t. Not so surprisingly, the PBMs did NOT share these fees with their health-plan clients (the employers).  Let’s give a ‘shout out’ to AT&T, UPS, Boeing, and Mallinkrodt, as your employees are paying for the yachts of the PBMs leadership instead of providing value to your working folks. That friends, is what no regulation looks like.  Profits on the backs of the patients, employers, physicians, pharmacists and of course, the taxpayer. 

This little perverse, predatory incentive is in the PBMs best interest to give preferential, formulary status to the highest priced drugs because the more expensive the drug is, the more money the PBM makes. For example, that is why Rheumatoid Arthritis patients must first try and fail Humira ($35k annual spend) AND Enbrel ($36k annual spend) BEFORE the PBMs ‘allow’ the physician to prescribe Simponi Aria infusions ($18k annual spend).  Go aheadcheck my math, the proof is in the proverbial pudding by seeing the outlandish profits posted year after year from OptumRX, CVS Specialty Pharmacy and Express Scripts. 

What can your practice do?  Advocate.  It’s a mindset. It’s a game. You can learn and master this. 

Be sure to sign up for NICA Advocacy updates to stay in the know about current and future PBM legislation.

Julie Baak is the Practice Manager of the Arthritis Center in Bridgeton, Missouri. Her NICA blog is called “From the Broomstick of Julie Baak”. Have comments, topic requests, or question for Julie? Please comment down below! 

70 Comments
  1. Avatar
    Adam Thomas 3 months ago

    Interesting Article Julie

    • Avatar
      Julie Baak 3 months ago

      Thanks for commenting. PBMs want people to think this is complicated. It’s not. Stay tuned for more info on this JamJob called PBMs.

  2. Avatar
    Kathy 3 months ago

    Wonderful article!

  3. Avatar
    karen m wilund 3 months ago

    This reminds me of what happened in the financial world concerning financial advisors acting in the best interest of the clients. Regulatory agencies passed laws to correct this problem. The same should be done here.

    • Avatar
      EltonS 3 months ago

      Agreed

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      Julie Baak 3 months ago

      We are trying to get legislation but naturally the lobbyists for PBMs are blocking it.

  4. Avatar
    Rose 3 months ago

    Thank you for sharing this information. Very important to keep up with current and future PBM legislation.

  5. Avatar
    AJ 3 months ago

    Way to stick up for the well being of the patient! Down with PBMs! Leave the clinical decision making to the doctor!

  6. Avatar
    Jacob Budde 3 months ago

    Well written, comprehensive, and compassionate.

  7. Avatar
    Robert 3 months ago

    This was a VERY inciteful article! Hopefully with the pandemic, people and companies will realized that proper healthcare and medication must take president over bottom line profit.

    • Avatar
      Julie Baak 3 months ago

      The pandemic has driven even more patients out of the hospital infusion centers. My staff is trying to get overrides from the Insurance companies and they point to the PBM and the PBM points to the Payer and they all throw up their hands and do nothing. I have found the most effective way to get the Payer to act is a public shaming with local TV reporter, the patient and the doctor. My office has done that with UHC and they responded with the override, but it is a lot of work.

  8. Avatar
    P Carson 3 months ago

    Excellent up to date information. We need this information to make educated decisions that affect us all.

  9. Avatar
    Keith 3 months ago

    Love the article Julie. I applaud you for continuing to shine the light on this issue.

  10. Avatar
    Art 3 months ago

    I feel the passion in your words. Let’s hope more voices can bring common sense into the equation of quality patient therapy.

  11. Avatar
    Annymous 3 months ago

    Well said. All of this wheeling and dealing, ultimately results in poor clinical outcomes for patients. When a PBM makes a better deal on a different drug the pt is required to switch. There are so few biologic drugs to begin with and the treatment so specific that when a patient is stable and symptoms controlled, it is very risky to think they will do well with the desired switch. RA & GI patients are forced to switch for insurance coverage. Cancer patients do not have to switch their biologic drug. All that tells me is that it’s ok for RA & GI patients to fail, because afterall, they won’t die. Cancer patients might die and the insurance co sued. All about the $$$$$$.

    • Avatar
      Julie Baak 3 months ago

      I can do my job perfectly with no PBM involvement. The PBMs make health care difficult. And, they can NOT do their job without my Physician prescriptions. Doctors need to refuse to write infusion drug rxs to any PBM.

  12. Avatar
    Michael Gentry 3 months ago

    This article is very informative/informational.

  13. Avatar
    John Flatley 3 months ago

    I am not surprised by your very well written article. I want to thank you again for going to bat for me in my own problem.

    • Avatar
      Julie Baak 3 months ago

      Thanks John, it is a pleasure to have good results for the Arthritis Center’s patients. Pleased we had a positive outcome!

  14. Avatar
    Jeff 3 months ago

    Thank you for your advocacy and your determination to make access and awareness more transparent. Excellent article!

  15. Avatar
    Debbie 3 months ago

    This is a fantastic article! It is so true. I am going through this process now and it has taught me a valuable lesson about the PBM’s wanting only more money and not valuing the patient’s wants and needs.

  16. Avatar
    Renau Bozarth 3 months ago

    Interesting Julie. Reminds me of a similar scenario recently where I was able to purchase medication at a pharmacy outright for a few bucks vs considerable more if I went through my insurance, whereby the actual cost was higher and so too the deductible. Told me then and there the complex games that go on, and who was benefitting. Fortunately for me, I asked the question. I was informed that if I had not asked, the pharmacy was under obligation to use my insurance plan. So kudos to you to informing your patients of this. Great article. You never cease to amaze me with all you do!

    • Avatar
      Julie Baak 3 months ago

      The system is set up to screw the patient. It is unacceptable.

  17. Avatar
    Monique Whitney 3 months ago

    Great article, and aptly timed, Julie. If there’s any doubt as to the truth of your points, one need only check the SEC for the latest earnings by CVS (parent company of CVS Caremark) and UnitedHealth (parent of OptumRx). Even during COVID their earnings are off the chart. Unfortunately the pandemic has allowed these unscrupulous bad actors to exploit people’s fears to such a degree that they can engage in unmitigated patient steering, profiteering on formularies and rebate grabbing. Keep spreading the word on PBMs – we need more people like you educating providers and the public on the many ways PBMs engage in fraud, waste and abuse at consumer and taxpayer expense.

    • Avatar
      Julie Baak 3 months ago

      Monique, thanks for your continued leadership in advocacy on all things PBM.

  18. Avatar
    Debbie 3 months ago

    Well said.

  19. Avatar
    Richard 3 months ago

    WOW! You had me at “Profits on the backs of the patients, employers, physicians, pharmacists and of course, the taxpayer.”

  20. Avatar
    Michael Rosenblatt 3 months ago

    Insightful and informative !

  21. Avatar
    Donna Geiselhart 3 months ago

    Alas, my bubble is burst again thinking that Big Phar “might” actually have my best interests at heart….
    …Thanks for shedding some light on this important issue, and hopefully pressuring them to be held more accountable! The article was very insightful.
    Thanks for keeping us informed Julie!! 👍

    • Avatar
      Julie Baak 3 months ago

      No one in any PBM has anyone’s interest, ever.

  22. Avatar
    Anna 3 months ago

    Great article!

  23. Avatar
    Rauchel Koehnemann 3 months ago

    Great article, very informative. Thank you for the insight. I look forward to seeing your perspective in the future!

  24. Avatar
    Terry Koebbe 3 months ago

    Very interesting !

  25. Avatar
    Korie 3 months ago

    Julie, you NAILED it in this article. Managing MS Infusion cases in St. Louis for nearly 8 years, I have seen the cycles change a lot over the years. The latest changes with insurance payers mandating site of care requirements for outpatient hospitals to send patients to lower cost of care was the first step to the scandal in my opinion. Is it a coincidence that UHC and Aetna now have partnered with Option Care Infusion Services and the specialty drug comes from their preferred specialty pharmacy OptumRx? Same with Anthem with CVS Specialty Pharmacy and Coram Infusion Services. The payers are partnering with PBM’s on contracted discounts off WAC pricing for Specialty Infusion Drugs and payers are mandating the SP procurement methods pushing our patients out the door to alternative infusion sites that can accept SP shipments. Making the process difficult for Specialty Providers to truly provide the best comprehensive care to our patients and monitoring their status. In addition, the payers are now mandating that any new Ocrevus patients will need to try and fail Rituxan first before Ocrevus will be approved even though Rituxan is off label for Multiple Sclerosis. The reason for this is because Rituxan has a biosimilar in which they plan on pushing due to cost. When did the decision for treatment fall into the hands of insurance companies and not the actual educated and licensed providers? We need to advocate for our specialty patients in all aspects physical health and financially. Thank you for putting out this amazing blog!

    • Avatar
      Julie Baak 3 months ago

      Korie, thanks for your support and confidence in our clinic with your Ocrevus referrals. The PBMs could care less about the patient as you and I experience that everyday in the work we do with our patients. We are on a mission here for change!

  26. Avatar
    David Meyer 3 months ago

    That is a lot of money! Thank you for sharing.

  27. Avatar

    Great article! Many do not realize that PBMs are the ONLY link in the healthcare chain that is completely unregulated. Doctors, nurses, pharmacists, even insurance companies must answer to a regulating body because it protects patients. PBMs are overriding medical orders in the interest of their own bottom line and are required to answer to no one – how is that in any way in our patients’ best interests??!

    • Avatar
      Julie Baak 3 months ago

      Shannon, we need regulation and an ‘opt out’ of any mandated pharmacy. IF patients HAD a choice none of mine would ever choose the big 3, CVS Specialty, Express Scripts and OptumRX. Profits over patient care! We will change this. One patient at a time.

  28. Avatar
    Jim 3 months ago

    I’m not surprised! But as a patient, you don’t have the medical knowledge to challenge it…

  29. Avatar
    Ann Marie 3 months ago

    Awesome article to help the patients.! Most are too afraid to speak out for themselves. Thanks for having our backs Julie!!

  30. Avatar
    Neal Shapiro 3 months ago

    Julie I was unaware of this situation. Thanks for the information. Anything that can be done to improve healthcare is a step in the right direction.

  31. Avatar
    Devon 3 months ago

    Julie, interested read. Love that you are shedding light on this issue.

  32. Avatar
    Dr. Katie 3 months ago

    Julie, a true and sad commentary on drug coverage and the burden it places on doctors and patients who have to jump through ridiculous, time consuming, anxiety producing and sometimes dangerous hoops to get needed medication. What ever happened to trusting doctors to know what is best for their patients? Seems to me drug companies need to partner with physicians, not impose an exhausting obstacle course to arrange medical care for a patient.

    • Avatar
      Julie Baak 3 months ago

      PBMs want to wear physicians offices out and have been successful in policy ping pong, step therapy and mandates. This will change. One patient at a time. One employer at a time. Educate. Regulate.

  33. Avatar
    Bryar B 3 months ago

    Great read Julie!! Very informative. Even as a prescriber this comes to news to me. We are always told to start with Enbrel or Humira as these are typically the preferred first step on patients formularies. This can be very frustrating at times especially when you have a complicated patient. They my may benefit better from infusion therapy such a Simponi Aria or ones that are every month. This allows for more points of contact between providers and patients for better and safer patient experiences. Thanks for the much needed information. Looking forward to hearing more about this in the future.

    • Avatar
      Julie Baak 3 months ago

      It is counter intuitive that PBMs mandated MORE expensive drugs over cheaper ones but that is exactly what they do.

  34. Avatar
    Amanda G 3 months ago

    Great information for all patients. I am fortunate enough to see Julie fight this battle everyday for the patients at The Arthritis Center. Her compassion to serve them and ensure they get the treatment prescribed for them, not the treatment preferred by PBM’s, is nothing short of awe inspiring. She is a true advocate who puts countless hours into the fight. Ride that broomstick proudly, Julie!

  35. Avatar
    Amanda 3 months ago

    Great information for all patients. I am fortunate enough to get to witness Julie going to bat against PBM’s daily for the patients of The Arthritis Center. Her compassion and dedication to making sure they get the treatment they are prescribed is awe inspiring. She puts countless hours into this effort. Ride your broomstick proudly Julie!

    • Avatar
      Julie Baak 3 months ago

      My desk is in the infusion room with my ‘seat mates’ our Infusion RN Amanda and Brandy our Infusion MA. They hear me on the phone all day long arguing with Insurance companies. For my birthday they gave me a T-Shirt that says “Arthritis Center” and above that my name Julie B. as in Broomstick with a photo of a broomstick because they have heard me say this over and over again fighting for our patients. I like it!

  36. Avatar
    Janet M Pratt 3 months ago

    Information needs to get out to the general public so the “patient” can advocate for themselves! Thanks for getting the word out there!

  37. Avatar
    Denice Brown 3 months ago

    Thank you Julie for being an advocate for patients. I know first had how PBM’s “direct patient care.” I was caught in the middle of this mayhem. I was forced to try several other bio drugs per the direction of my insurance carrier and it’s PBM. Forced to have unnecessary meds which challenged the scientific fact that my Rheumatologist knew what would work best. I was forced to miss a treatment because of this. As you know, it wasn’t until you and your staff spent many hours writing letters and making phone calls until my current treatment received “special authorization .” This has got to stop! Patients suffer, small practices and practitioners are forced to spend money by way of staff hours to advocate for its patients. Shame on our government for allowing this.

    • Avatar
      Julie Baak 3 months ago

      Denice is a hero. She went on TV with Dr. Baak to publicly shame UHC into allowing her to come back to my office for her infusions! UHC does not respond to letters, calls, faxes, requests. They go big or go home! We sent them home and got this done!

  38. Avatar
    Lindsey K 3 months ago

    Very information article. This is so unfortunately and infuriating.

  39. Avatar
    Heidi Hartwig 3 months ago

    Thank you so much Julie for writing this article. I hope you can continue to inform all of us that haven’t got a clue in the health care system .

  40. Avatar
    Marty Raleigh 3 months ago

    Nailed it! Well written and it was easily broken down to understand. It’s amazing to how many of these PBM’s continue to be part of the Fortune 500 list and never get called out!

  41. Avatar
    Brandy F. 3 months ago

    I work in the infusion room with Julie and Amanda. I am a Medical Assistant and work close with the providers, Amanda, and Julie to make sure patients get started on their treatment right away so they can improve their quality of living. I know first hand how dedicated and resilient Julie is when it comes to our patients and getting them on the right therapy for their diseases. Being a patient myself and on biologic therapy it is comforting to know someone is out there advocating for us! Thanks Julie for all you do it does not go unnoticed.

    • Avatar
      Julie Baak 3 months ago

      Brandy thanks for your comment and for being a superstar! She has been dealing with Rheum Arthritis since age 18 months old. She works hard delivering infusion services along side myself and Amanda, RN. We have an amazing team and our patients can count on us!

  42. Avatar
    anonymous 3 months ago

    Korie, nice response and well written. ” Paying for position” meaning where drug will be placed on formulary, or not be placed, is nothing new. PBM’s have been doing this for years making them the winner of the biggest Profits! I believe that as personalized medicine continues to grow and biologics continue to become more sophisticated and more important for patients, we will see even more attempts to control cost of drugs, infusions, etc.

    There is a push from our government to identify and repair this situation it is called the Transparency law . This law would identify ALL the rebates, discounts, etc that the PBM’s get and give to distributers and SP’s, & pharmacies. Transparency laws would require the customer to be informed of these discounts AND the discounts would be passed along to the customer. So far not many states are moving legislation forward related to transparency. There is also legislation in some states to prohibit copay cards which is a travesty.

    Who knows what changes the years will bring. I think infusion centers were blindsided by Vertical integration and will need to step up their negotiating skills with the major payers or they will lose what profits they make, just like local small town pharmacies, and independent physicians. Infusion centers need to be savvy and innovative when contracting and negotiating. A smart infusion center manager will realize it is better for a Payer to contract with them that build out a new place for infusion, or buy out an existing infusion center. The current infusion centers have what it takes they have patients relationships, relationships with MD’s, supplies, staff, processes, etc. I hope they can survive.

    • Avatar
      Julie Baak 3 months ago

      Thanks for the comments. Patients, Infusion centers, Physicians and taxpayers need to rise up and DEMAND change. Our office has drawn a line in the sand and will NOT accept ANY drug from ANY PBM. If you want to email me off line julie@drbaak.com I would be happy to discuss more ways to work together.

  43. Avatar
    Ted 3 months ago

    Informative article. Thanks for bringing this situation to light as it dampens the quality of patient care.

  44. Avatar
    Linda 3 months ago

    Julie, we need more fearless and determined people like you pushing for change. You are raising awareness and advocating for patient rights. We need your voice and your efforts to improve the quality of our health care system. Any suggestions for patients/general public to get more involved?

    • Avatar
      Julie Baak 3 months ago

      Linda, thanks for your comment. Individual patients need to DEMAND an opt out of mandated pharmacy. This can be done by requesting an override. The PBMs do not want to give these overrides so they make it difficult and time consuming for the patients. Any of the Arthritis Center patients can call my office and we will do it for them. I am working with the ACR, NORM and CSRO to try and get a process manual put together to assist offices in getting these overrides.

  45. Avatar
    Sheela Solomon 3 months ago

    Love the article Julie. Awesome Information. You shed light on this issue. They have teamed up with Medicare and we get drugs from them.

  46. Avatar
    Kevin A. Wood 3 months ago

    Julie, It is great that you are taking the time to fight this fight! It is so refreshing to see that you are the voice for so many people who struggle financially hoping and searching for the proper medications to treat their medical conditions with affordable medical drug costs. Patients should not be manipulated by the PBM system(s) into higher costs medications or forced to use medications that do not work as well for the amount of money spent on those particular medications. Patients suffering from medical illness already have enough life struggles with medical challenges which is hard enough let alone to add outrageous medication costs with out the much needed Government oversight, regulation and control. FDR implemented the NEW DEAL back between 1933 -1939 for relief , reform and recovery.

    Great work! Best of luck with your continued efforts!

    • Avatar
      Julie Baak 3 months ago

      Kevin, thanks for your comment. As a realtor, you know the regulations that you are under and the PBMs are under no regulation and answer to no one. And they take it a step further and don’t answer the phone! We are coming for them, one patient at a time.

  47. Avatar
    Emily 3 months ago

    Wow! I had no idea about this phenomenon in prescriptions with PBMs. Thank you for keeping us informed!! We need to stand together & fight for patients and decent health costs.

  48. Avatar
    Amy 2 months ago

    Well said. Thank you for shining a light in this issue from your broomstick.

  49. Avatar
    Laura 2 months ago

    Great article! This is an outrage! Drug company kickbacks should be illegal. PMBs, even HMOs and any insurance or middleman-led “managed care” is nothing more than a scam to manage profits… not care. It permeates all drug treatments, including IV infusions. I don’t know what the solution is to healthcare, but the system we have is fraught with injustice for patients and physicians alike. Greedy insurance companies and PMBs must be regulated. We need managed profits, not managed care or else when it comes to giving and receiving healthcare, especially for chronic conditions, we all just live to work to pay the insurance companies. Regulation is long overdue and people should be held criminally liable. Thank you for shedding light on this and fighting this injustice!

  50. Avatar
    Valerie Wasserman 2 months ago

    Amazing informative article Julie. I remain incredibly frustrated with the healthcare system and it’s information like this that consumers/patients need to hear about. Can u submit this piece as an opt-Ed to your local paper. Would be great if it were syndicated out! Has anyone done investigative reporting on this issue on a national level? How can we get the word out more broadly?

  51. Avatar
    Barbara Bocanegra 2 months ago

    Thank you Julie!

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