How Health Insurers Are Using Pharmacy Benefit Managers to Control Drug Prices

In this episode of Services Economy with Fexingo, Lucas and Luna dive into the controversial role of pharmacy benefit managers (PBMs) in the healthcare system. They focus on the specific case of Express Scripts, owned by Cigna, and how PBMs negotiate drug prices with manufacturers and set formularies that determine patient access. Lucas explains the PBM business model: they extract rebates from drug makers in exchange for favorable placement on formularies, but those rebates rarely flow to patients at the pharmacy counter. Luna brings data showing that the top three PBMs — Express Scripts, CVS Caremark, and OptumRx — control nearly 80% of the prescription drug market. They discuss the Federal Trade Commission's recent report critical of PBM practices and the potential for regulatory reform, including a bill in Congress that would require PBMs to pass a percentage of rebates to patients. The episode concludes with a look at how vertical consolidation — insurers owning PBMs — creates conflicts of interest that can raise patient costs. #HealthInsurers #PBMs #PharmacyBenefitManagers #ExpressScripts #Cigna #CVSHealth #OptumRx #UnitedHealthGroup #DrugPricing #HealthcareEconomics #FTC #Regulation #Rebates #Formularies #VerticalConsolidation #ServicesEconomy #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo