Many
employers
are
unknowingly
collecting
drug
rebate
money
that
is
funded
by
their
sickest
workers,
according
to
Mark
Cuban.
During
Forbes’
Healthcare
Summit
last
week
in
New
York
City,
Cuban
noted
that
Americans
are
often
paying
full
list
prices
during
their
deductible
periods,
effectively
subsidizing
the
rebates
that
flow
back
to
pharmacy
benefit
managers
and
employers.
This
is
a
dynamic
he
argues
most
CEOs
don’t
fully
understand.
Cuban
pointed
to
a
common
scenario:
an
employee
enrolled
in
a
high-deductible
health
plan
receives
a
prescription
for
a
brand-name
drug
like
Eliquis,
which
can
retail
around
$600
a
month.
Until
the
employee
meets
their
deductible,
they
have
to
pay
that
full
list
price
—
even
if
the
PBM
has
negotiated
a
substantial
rebate
on
the
drug.
That
rebate,
which
can
amount
to
hundreds
of
dollars
per
prescription,
never
makes
its
way
back
to
the
patient
footing
the
bill.
Instead,
the
money
goes
through
the
PBM
and
ultimately
back
to
the
employer,
Cuban
explained.
To
him,
this
structure
flips
the
intent
of
rebates
on
its
head.
Rather
than
lowering
costs
for
the
people
who
need
the
medication,
this
system
ends
up
using
those
patients’
high
out-of-pocket
payments
to
generate
rebate
checks
that
benefit
their
employer.
Cuban
warned
that
by
profiting
from
rebates
funded
by
sick
workers,
companies
could
be
falling
short
of
their
obligation
to
act
in
employees’
best
interests
under
the
Employee
Retirement
Income
Security
Act.
He
highlighted
direct-to-employer
drug
purchasing
models
as
a
way
to
avoid
this
issue.
His
company,
Cost
Plus
Drugs,
is
developing
direct-to-employer
drug
programs
designed
to
bypass
PBMs
and
secure
net
pricing.
This
way,
employees
aren’t
subsidizing
rebates
with
their
own
medical
bills,
Cuban
stated.
“I
sit
with
the
CEO,
and
I
say,
‘Look,
you
are
getting
ripped
off
by
your
PBM.
And
I
understand
it’s
difficult
to
just
move,
but
there
are
a
growing
number
of
direct-to-employer
programs
that
are
being
created,’”
he
remarked.
One
of
Cost
Plus
Drug’s
partners
for
its
direct-to-employer
drug
pricing
model
is
CenterWell,
Humana’s
healthcare
services
brand.
Humana
CEO
James
Rechtin
noted
that
CenterWell
wants
to
simplify
its
drug
supply
chain
to
deliver
medications
more
efficiently
and
transparently.
The
company
is
doing
more
contracting
directly
with
manufacturers
so
consumers
and
employers
can
see
the
true
net
cost
of
drugs
and
eschew
the
layers
of
intermediaries
that
drive
up
prices.
“With
pharmacy,
we
basically
looked
at
the
traditional
model,
and
we
said,
‘We
are
not
getting
the
cost
efficiency,
the
affordability,
that
we
need
to
to
make
sure
that
our
members
are
getting
access
to
medications,’”
he
said.
If
efforts
to
eliminate
the
middlemen
continue
to
scale,
workers
could
save
billions
in
out-of-pocket
costs,
Rechtin
and
Cuban
agreed.
Photo:
mathisworks,
Getty
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