Myths & Facts
Common misconceptions about PBMs
Myth
PBMs are to blame for sky high drug prices.
Fact
Drug companies alone set prices for prescription drugs. PBMs exist to help get the lowest net cost for their clients and consumers. In fact, a 2019 U.S. Department of Health and Human Services Office of Inspector General report found that rebates lead to lower prescription drug costs in Medicare Part D. Express Scripts continues to offer new and innovative solutions to help control consumer out of pocket costs, including caps on copays through the Copay Assurance plan.
Read more about drug prices and consumer affordability
Myth
PBMs are a “black box” with complex and opaque business practices.
Fact
Express Scripts clients can choose among different PBMs and pricing models to best suit their needs, including our fully transparent offering, ClearCareRx. Clients receive detailed financial disclosures, which include rebate arrangements with pharmaceutical manufacturers and pharmacy claims insights, as well as administrative fees for services provided by Express Scripts. Further, we adhere to strict, contractually binding governance standards and provide clients with full audit rights to confirm we have performed in accordance with our agreements with them.
Read more about PBM governance and admin fees
Myth
The PBM industry is anti-competitive; employers and health plans are “forced” to use PBMs, which undermines patient choice.
Fact
The PBM industry is competitive and diverse, with more than 50 individual companies1 of varying size operating nationwide to serve a variety of clients. Clients choose to work with PBMs because they provide a range of benefit management choices that are good options for many different types of clients and because PBMs have proven they deliver significant savings. Express Scripts is effective at lowering the net cost of prescription drugs for clients and patients.
Read more about PBMs
Myth
Large insurers like Cigna Healthcare use their PBMs to increase their profits and control over the health care industry.
Fact
Express Scripts and Cigna Healthcare are two separate businesses with different operating models, products and services. Express Scripts sits within Evernorth Health Services, which is a health services organization, offering pharmacy benefits, home delivery pharmacy, specialty pharmacy, specialty distribution, care delivery and care management solutions to a wide range of commercial and government employers, health plans, health systems, hospitals and health care providers. In contrast, Cigna Healthcare is a health plan and managed care organization that provides health benefits, including leading medical networks for employers, seniors and individuals through Cigna Commercial, Cigna Medicare Advantage and Cigna Individual & Family plans. While both Evernorth Health Services and Cigna Healthcare sit under the umbrella of The Cigna Group parent company, the companies operate independently of each other and are legally prohibited from engaging in practices that would make the healthcare industry less competitive.
Myth
With “tentacles” across the entire drug supply chain, Express Scripts uses its monopoly power to drive up costs and hurt pharmacies and consumers.
Fact
Express Scripts is not a “monopoly” and does not have “monopoly power.” The PBM industry is highly competitive and diverse, with more than 50 individual companies of varying size operating nationwide to serve a variety of clients.
Express Scripts exists to lower the cost of prescription drugs – full stop. Express Scripts is effective at lowering the net cost of prescription drugs for clients and patients by driving greater competition among manufacturers, negotiating with retail pharmacies to help ensure robust access for patients, and creating clinical tools and programs that help patients start – and stay – on the medications they need.
Read more about drug prices and ESI’s network of pharmacies
Myth
PBMs incentivize drug manufacturers to inflate drug list prices so they can negotiate higher rebates – aka “kickbacks” – and make a profit.
Fact
Drug manufacturers are focused on monopolizing the system, reducing competition and keeping their prices high. PBMs like Express Scripts drive down costs for plans and patients by driving competition among pharmaceutical manufacturers where possible to deliver lower net costs and incentivizing the use of less expensive generic medicines among clients and customers that deliver the same clinical value. Multiple studies and analyses have validated that rebates are not responsible for drug price increases.
Read more about drug prices and rebates
Myth
Drug prices remain high for consumers because Express Scripts retains the majority of rebates.
Fact
Our clients receive nearly all of the savings we secure through rebates, and they in turn may choose to use them to lower premiums and cost share and enhance other health care benefits. Express Scripts provides choice and flexibility for clients to make decisions that support their unique member populations.
Read more about rebates
Myth
Express Scripts forces certain pricing models onto its clients and charges excessive fees.
Fact
Clients have the choice among different PBMs – more than 50 individual companies – to best suit their needs. At Express Scripts, every client can select which pricing model makes sense based on the specific needs of their populations: 1) pass through pricing; 2) value sharing arrangements on rebates; and/or 3) spread pricing. We work with clients to design tailored arrangements to manage drug costs and, in some cases, offset or forgo fees for the PBM administrative services we provide.
Read more about how Express Scripts shares in the value we create with clients
Myth
Spread pricing is a way for PBMs to secretly extract profits.
Fact
Our economic models are transparent and auditable and selected by the Express Scripts client based on the needs of its organization. Many of Express Scripts’ clients opt for a guaranteed pricing model known as spread pricing because it provides a predictable cost structure and mitigates their risk; in fact, many clients specifically request a spread arrangement at the outset of their engagement with Express Scripts. All clients receive detailed disclosures of Express Scripts’ principal revenue sources, including rebate arrangements with pharmaceutical manufacturers and pharmacy claim insights.
Read more about spread pricing
Myth
PBMs make formulary decisions for their clients.
Fact
Clients have control over their formularies, the drugs they include, and the benefit design, including co-pays, co-insurance, etc. Clients are free to accept, reject, or customize Express Scripts’ standard formulary offerings – or create their own. This is one of many choices clients have in designing their benefits in order to best serve their needs and the needs of their members.
Read more about formularies
Myth
Formularies are deliberately designed to drive the use of drugs where PBMs make more money, contributing to the increases in list prices.
Fact
Clients have full control over their formularies and the drugs they include.
Some clients elect to use or customize Express Scripts standard formularies. Express Scripts uses independent, practicing physicians and pharmacists (not employed by Express Scripts) to evaluate and recommend new drugs be added – or excluded – from our formularies. Their recommendations are based on clinical evidence alone, not price.
Express Scripts utilizes a clinically-led process to create its standard formularies and ensure it includes safe, effective and affordable medicines to drive the right outcomes for patients. This includes use of lower-cost generics, biosimilars and competitively-priced branded medicines.
Read more about formularies
Myth
There is no evidence that biosimilar competitors lower patient out-of-pocket costs.
Fact
Just as we saw when generics originally came to market 30 years ago, it takes time to drive adoption and for competition to help lower costs long-term. Express Scripts has begun to include new inflammatory biosimilars on our formularies in 2023 and is actively working to educate the market and support greater adoption and ultimately drive greater competition – to lower drug costs for clients and patients.
Read more about drug prices
Myth
PBMs hurt small community pharmacies.
Fact
Express Scripts has thousands of independent pharmacy partners in our network and has worked to support this robust industry that continues to grow nationwide, including in rural markets. In fact, independent pharmacies receive, on average, higher reimbursements than chain drugstores. Just recently, Express Scripts launched IndependentRx, a new initiative that will increase reimbursements, expand care services provided at rural independent pharmacies, and establish an industry-first Independent Pharmacy Advisory Committee to support pharmacy growth across the U.S.
Read more about ESI’s pharmacy network and IndependentRx
Myth
Express Scripts created a group purchasing organization (GPO) – Ascent – to escape PBM regulations and maintain the high-price status quo.
Fact
GPOs combine purchasing volume to achieve discounts and are used by many organizations across the health care and other industries. As a GPO, Ascent makes prescription drugs more affordable by aggregating purchasing across health plans and PBMs to negotiate greater discounts with pharmaceutical manufacturers. By leveraging its combined scale, Ascent helps ensure that manufacturers provide competitive rebates to the benefit of its plan sponsor clients. This model drives down premiums and other costs for more customers.
Read more about Ascent GPO
1 2022 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers