Summary
A government-granted monopoly has allowed a pharmacy benefit manager owned by Cigna to overbill the Defense Department for years, in what amounts to an enormous…
Source: jacobinmag.com
AI News Q&A (Free Content)
Q1: What role do pharmacy benefit managers (PBMs) play in the US healthcare system?
A1: Pharmacy Benefit Managers (PBMs) act as intermediaries in the US healthcare system, managing prescription drug programs for health plans. They handle formularies, rebate payments, and drug use management, and negotiate between pharmacies, drug manufacturers, and insurance companies. As of 2023, PBMs managed benefits for 275 million Americans, with the top three PBMs covering about 80% of the market. Their practices have come under scrutiny for potentially raising drug prices unfairly.
Q2: How has Cigna's Express Scripts been involved with the US military's healthcare program?
A2: Express Scripts, a pharmacy benefit manager owned by Cigna, has managed pharmacy benefits for the US military's TRICARE program since 2003. This program serves over nine million service members and their families. Allegations have been made against Express Scripts for overcharging the Defense Department by billions of dollars, attributed to a government-granted monopoly allowing them to overbill for prescription drugs.
Q3: What are the financial implications of drug pricing in the United States compared to other countries?
A3: The United States spent $1,126 per capita on prescribed medicines in 2019, nearly double the average spending of $552 by other developed countries. Factors contributing to high drug prices include limited government regulation and negotiation mechanisms compared to other nations. This results in high healthcare spending and significant out-of-pocket costs for Americans.
Q4: What recent scholarly insights exist on the transparency of PBM business models?
A4: A recent scholarly paper discusses the opaqueness of the PBM business model in the United States. It suggests the need for more transparent insurance business models for PBMs, proposing fixed premium and fee-for-service models to improve transparency and accountability. These models aim to provide clear financial metrics for evaluating PBM performance.
Q5: What are the key findings from recent research on the economic impact of pharmacy services?
A5: Recent research utilizing adaptive behavioral AI and reinforcement learning has shown potential in enhancing pharmacy services by personalizing interventions for pharmacists. This approach can improve public health awareness and pharmacy management, ensuring better access to essential medicines, especially in low- and middle-income countries.
Q6: What steps have been suggested by officials to address the pricing issues with Express Scripts?
A6: Officials, including Senator Warren, have called for the Defense Health Agency to audit Express Scripts. They stress the need for transparency and adherence to contractual obligations to prevent taxpayer overcharging. Recommendations include including audit requirements in the National Defense Authorization Act to ensure compliance and fair pricing.
Q7: How does the cost-effectiveness of new cancer therapies in the US compare internationally?
A7: Recent studies on new cancer therapies show significant survival benefits but reveal that their high costs make them less economically feasible in the US compared to the UK and China. For instance, the cost per quality-adjusted life year for some therapies in the US can be as high as $751,897, necessitating substantial price reductions to meet affordability thresholds.
References:
- Jacobin: https://jacobin.com/2025/11/big-pharma-drastically-overcharges-the-us-military
- Stars and Stripes: https://www.stripes.com/theaters/us/2024-07-02/tricare-express-scripts-cigna-defense-health-agency-14362467.html
- Senator Warren Newsroom: https://www.warren.senate.gov/newsroom/press-releases/icymi-at-hearing-military-leaders-agree-with-warren-dod-must-audit-giant-health-care-contractors-that-price-gouge-taxpayers
- Healthcare Dive: https://www.healthcaredive.com/news/cigna-aggressive-pharmacy-benefit-manager-defense/722638/
- Health System Tracker: https://www.healthsystemtracker.org/chart-collection/how-do-prescription-drug-costs-in-the-united-states-compare-to-other-countries/
- Journal of Pharmacy and Pharmaceutical Sciences: A Pharmacy Benefit Manager Insurance Business Model
- Journal of Urology: Updated cost-effectiveness analysis of first-line novel therapies in locally advanced or metastatic urothelial carcinoma across the UK, US, and China.
