Pharmacy Benefit Managers and Medicare Beneficiary Access to Prescription Drugs

Abstract

Despite the fact that prescription drugs are an increasingly important component of modern health care, especially for the elderly and disabled populations suffering from chronic conditions, 35% of Medicare beneficiaries lack any form of prescription drug insurance. Congress is currently debating six major proposals to extend insurance protection to outpatient prescription drugs under Medicare. Five of these proposals suggest the use of pharmacy benefit managers (PBMs) to improve the cost-effectiveness of the prescription drug benefit.

A Tufts Center for the Study of Drug Development (Tufts CSDD) survey of eight leading PBMs shows that during the last five years PBMs have increased their enrollment of Medicare beneficiaries considerably. PBMs currently facilitate moderate to full access to pharmaceuticals for approximately 20% of Medicare beneficiaries. Seven of the eight PBMs surveyed are also developing disease management programs targeted specifically at the Medicare population. However, regarding the feasibility of a universal prescription drug benefit, a number of issues concerning how to structure government contracts with PBMs and how to meet certain political challenges to PBM mediation remain unresolved.