Study: Drug benefit managers save billions

Two of the nation's biggest pharmacy benefit managers save the public up to $87 billion a year, according to a new study released Monday on the eve of a Senate Judiciary hearing on their proposed merger.

Express Scripts and Medco Health Solutions funded the study that found that they jointly save employers, the government, labor unions and consumers between $51 billion and $87 billion every year on the cost of prescription medications, according to the study by Compass Lexicon. The two companies want to merge but the Federal Trade Commission must first determine whether that raises antitrust concerns.

Critics — particularly retail pharmacies — say the merger would give the two companies too much control over people's drug benefits, potentially driving up costs and hurting access to needed medications.

"Pharmacy benefit managers (PBMs) save consumers billions of dollars, but most people do not know very much about the role such firms play in the healthcare system," study co-author Jonathan Orszag said in a statement. "We hope this study shows the economic benefits created by PBMs today, the role that PBMs should play in constraining rising healthcare costs in the future and the role the merger of Express Scripts and Medco can play in accelerating those savings."

The breakdown of the savings is as follows: $21.7 billion a year for the federal government and Medicare beneficiaries; $61.9 billion for employers and individuals; and $3.5 billion per year for labor unions.

The study found that the companies are driving down drug prices not only by negotiating favorable prices from manufacturers and retail pharmacies but also by increasing the efficiency of prescription management; improving patient adherence to medications; detecting and closing gaps in care; and using advanced systems to personalize pharmacy care for patients with chronic conditions and complex therapeutic needs.

Separately, the PBM lobby released a poll that found broad patient satisfaction, with 89 percent of insured adults saying they're satisfied with their coverage.

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