Tyson Foods plans to become one of the first large companies to part ways with traditional pharmacy benefit managers, according to CNBC.
What’s going on: “After putting its benefits contract up for bid, Tyson dropped CVS Health’s Caremark and chose PBM startup Rightway to manage drug benefits for its 140,000 employees starting this year, the companies said [last week].”
- The move was a bid to save on its health care spending, which under the large PBM was rising “anywhere between 12% to 14% … for pharmacy” costs, Tyson Vice President of Global Benefits Renu Chhabra told the news outlet.
- She was unable “to get answers [from CVS Caremark] on what was driving” the higher prices for prescriptions.
- “Most large employers work with the three biggest PBM players: CVS’ Caremark, Cigna’s Evernorth and UnitedHealth Group’s OptumRx. By the end of 2022, those big three PBMs controlled nearly 80% of the pharmacy benefits market in the U.S., according to a Health Industries Research Center report,” CNBC reports.
- The largest PBMs operate with limited federal oversight and exert additional control over clients by steering business to specific pharmacies, often those owned by their parent companies.
The fix: Congress should pass legislation to change the PBM model, the NAM said.
- Reforms to “increase transparency, ensure pharmaceutical savings are passed from the PBM to workers and plan sponsors and delink PBM compensation from the list price of medication” would allow employers to negotiate fairly and save on health care costs, said NAM President and CEO Jay Timmons.