Express Scripts CEO Tim Wentworth defends role of PBMs in drug prices
Mylan’s Epipen became a focal point in the debate over the rising costs of pharmaceuticals, after its price increased by nearly 500 percent over seven years.
In a recent interview with “CBS This Morning” co-host Norah O’Donnell, Mylan CEO Heather Bresch said “middlemen from wholesalers to insurance to PBMs [pharmacy benefit managers] are all playing a part” in driving up drug prices.
But Tim Wentworth, CEO of Express Scripts – the largest pharmacy benefit manager, or PBM – said her explanation “doesn’t make sense.”
“It doesn’t make sense to me because at the end of the day, from the standpoint of drug price, the pharma companies are making that determination. Our job is, quite frankly, to the extent that they’ve been inflating them, to go and make sure our clients don’t pay those,” Wentworth told “CBS This Morning” Tuesday.
Pharmacy benefit managers, or PBMs, negotiate drug prices directly with drug companies. They work on behalf of insurance and employer groups that pay for drugs, and act as middlemen, adding costs by collecting rebates and other fees. They say they are the ones trying to lower drug prices.
Wentworth defended their role.
“In a nutshell, on behalf of 80 million patients, we take care of them in that we have deep specialist pharmacy practice. We negotiate with drug companies… to get the prices down and then we also negotiate with retail pharmacies. As you know there are 70,000 of them in this country and by narrowing down the choices to a reasonable number there, we can get significant discounts there,” Wentworth said.
“So my understanding is that just as a drug company, when the price of a drug increases, you get a rebate and that rebate actually gets larger. So everyone actually benefits from a higher drug price, including PBMs,” O’Donnell said.
Wentworth disagreed, saying that he’d be “quite happy” to not have high prices.
“If you look at the PBM model, we benefit the most when we can actually drive clients to generic penetration where there are no rebates. And when we do obtain rebates our clients determine and it helps them stay in the benefit-providing business, as it were. So those rebates flow through us, 100 percent of the time our clients determine where it goes,” Wentworth said.
He then pointed fingers at pharmaceutical companies.
“Pharma companies determine their prices and pharma companies determine whether or not they want to discount their price at a cost level through rebates or if they want to lower to a list price that is discounted,” Wentworth said.
“What is the advantage of using a PBM as opposed to just negotiating directly to the drug company?” co-host Gayle King asked.
“The role that we play with aggregating those 80 million lives, it enables us to make wholesale changes to the system,” Wentworth said.
“You’re saying that you can buy in bulk, negotiate with pharma, reduce the price of a drug. ... Then why does the price of drugs keep going up?” O’Donnell asked, citing Express Scripts’ latest report which revealed that drug prices rose by about 11 percent last year.
“The good news is for our clients, the unit price of drugs went up 2.5 percent. And the way that that happens, I can’t explain. You need to have a pharma company CEO explain why they keep raising the prices,” Wentworth said.
Wentworth was also asked if he would be willing to be more transparent about how much Express Scripts makes from rebates.
“We support absolute transparency with our clients,” he said, and explained that Express Scripts’ clients can use its online digital tools to see balances in their high-deductible plans, drug prices, the lowest-cost retail pharmacies to purchase them, and more.