Each year, Connecticut residents face the reality of higher health insurance premiums yet receive less coverage in return. As President and CEO of Northeast Pharmacy Service Corporation, I hear from our network of independent pharmacists about it every day.
Their patients tell them that they are paying more for insurance, only to face higher copays, higher deductibles, and higher out-of-pocket costs for their prescriptions. Many are forced to choose high-deductible plans just to “afford” insurance, but even then, they are hit with steep costs at the pharmacy counter.
The system is clearly broken, and it’s time for Connecticut lawmakers to take a hard look at what is actually driving these rising prescription costs.
The answer lies, in part, with pharmacy benefit managers (PBMs)—the middlemen who sit between insurers, drug manufacturers, and patients. PBMs were originally introduced to help lower drug prices, but they have evolved into powerful, profit-driven entities that increase costs for consumers while padding their own pockets.
PBMs negotiate prices with drug manufacturers, decide which medications will be covered, and keep the negotiated discounts hidden from both insurers and consumers. This lack of transparency results in inflated prices, as patients pay far more than the actual cost of the drugs.
Multiple studies over the past few years have exposed how PBMs are driving up healthcare costs. In some cases, insurers and PBMs have charged as much as 27 times the price that drug manufacturers charge for the same medications.
This trend is not just a local issue; it reflects a national shift in how prescription drugs are priced. Three major PBMs alone, which are owned by large insurers, now control 80% of the prescription drug market in the U.S. These companies, which operate under the guise of managing drug benefits, had combined revenues of nearly $925 billion in 2023.
For independent pharmacies, the rise of PBMs has been financially devastating. Pharmacists are often forced to fill prescriptions at a loss, reimbursed at rates lower than what it costs them to purchase the drugs. This practice forces independent pharmacies to subsidize massive corporate profits while struggling to stay afloat.
For many underserved communities, independent pharmacies play a crucial role as a health care touchpoint. With health care equity always a concern, the loss of more independent pharmacies will make a challenging situation even worse.
As a result, Connecticut taxpayers are footing the bill with funds that could be better spent lowering drug prices or improving healthcare access. PBMs are suppressing discounts that should be passed on to patients as was intended when they first came into play. Instead, people are choosing higher deductible plans just to afford insurance.
Simply put, paying pharmacies less does not reduce drug costs, it just increases PBM profits. If Connecticut is serious about addressing healthcare affordability, lawmakers must take action to rein in PBM practices. Legislation requiring transparency and accountability would go a long way towards helping if we are to make prescription drugs more affordable for patients and ensure that the system works for everyone, not just the middlemen.
Patricia Monaco is President/CEO of the Northeast Pharmacy Service Corporation.