Insurance Coverage and PBMs

As health insurance companies and their pharmacy benefit managers (PBMs) increasingly shift health care costs onto patients through high deductibles and coinsurance, more than one third of Americans with insurance report spending more in out-of-pocket costs than they could afford in the last month.

That's not how insurance is supposed to work.


Insurers and Middlemen Force Many of the Sickest Patients to Face High Out-of-Pocket Costs

Due to negotiations in the market, in 2021 the prices health plans paid for brand medicines increased by an average of just 1.0%.

But it often doesn’t feel that way for patients because insurers and pharmacy benefit managers have increasingly shifted more health care costs to patients through high deductibles and coinsurance. For services like hospital stays and doctor visits, health plans routinely share the negotiated prices they receive with patients. When it comes to life saving medicines, that's often not the case.

In fact, half of commercially insured patient spending on brand medicines is based on the undiscounted list price of a medicine rather than the negotiated net price health plans receive. And commercially insured patients with a deductible have seen their out-of-pocket costs for brand medicines increase 50% since 2014.

Patient assistance programs offered by biopharmaceutical companies can provide a valuable source of support for many commercially insured patients to afford out-of-pocket costs associated with insurance coverage for their medicines. But health insurers and pharmacy benefit managers are using harmful tactics, like accumulator and maximizer programs, to deny patients the benefit of this assistance at the pharmacy.

PhRMA Insurance Coverage


Understanding the Barriers to Care Patients Face and the Drivers of Health Care Spending

In addition to high out-of-pocket costs, health plans and PBMs also restrict access to medicines. In 2022, the three largest PBMs—which manage 80% of all prescriptions filled in the U.S.—excluded more than 1,150 medicines from their standard commercial insurance formularies. This represents a nearly 1,000% increase in excluded medicines since 2014 and includes medicines that would provide patients needed treatments at lower costs.

Finally, middlemen use utilization management tools, like requiring prior authorization or failing first on other therapies, which can create significant barriers between patients and the medicines their doctors prescribe. Patients with some of the most serious chronic diseases—autoimmune diseases, allergies and diabetes—and patients from communities of color are more likely to report experiences with these health plan barriers than other Americans who take prescription medicines.

While health care providers like doctors and nurses are there for patients at pivotal moments, hospital administrators often take advantage of the system to pad their bottom lines at the expense of patients. In fact, hospitals are the largest share of health care spending in the United States and are a leading driver of higher costs and premiums for patients across the country.

To fix our health care system, we need a robust discussion about the barriers patients face to accessing their medicines and the drivers of health care spending. As part of that discussion, voters overwhelmingly support solutions that would help rein in insurers and their PBMs.

PhRMA Insurance Coverage


When You’re Sick, You Should Be Battling Your Illness — Not Battling Insurance Companies and Their PBMs.

Three insurance company PBMs control 80% of the patients’ medicines, and they act like it. They use their market power to get tens of billions in rebates and discounts on medicine — savings that should be going to patients. In 2020, more than half of every $1 spent on brand medicines went to payers, middlemen, providers and other stakeholders.

Insurers and their PBMs decide what medicines are covered, what medicines aren’t and what you pay for them. Regardless of what your doctors prescribed. Which leaves you fighting them for your medicines, instead of fighting your illness.

PBMs are putting their profits before your medicine. Learn more on how we can ensure these savings should be shared with patients.

PhRMA Insurance Coverage

Americans overwhelming support strong reforms that rein in PBM abuses

A new survey of over 20,000 Americans in all 50 states and 435 congressional districts shows that Americans are deeply troubled when they learn that PBMs are behind practices that make it harder for them to access and afford their medicines, such as not sharing medicine discounts directly with patients or steering them to pharmacies that PBMs own. As a result, there is broad, bi-partisan interest in meaningful reforms to the broken PBM business model that raises costs and harms patients. Learn more.

This website uses cookies and other tracking technologies to optimize performance, preferences, usage, and statistics. By clicking “Accept All”, you consent to store on your device the cookies and other tracking technologies that require consent. You can tailor or change your preferences by clicking “Manage My Cookies”. You can check our privacy policy for more information.