Dear Colleague,
Halloween used to pretty much be a kid’s holiday.
These days 72 percent of adults say they participate in Halloween and spend over $114 per person on costumes, decorations, and candy.
Speaking of candy, the most popular candy by states are:
I find the findings pretty fascinating. Reese’s is the most popular candy in the U.S., which makes total sense (to me). But candy corn as number one? Really, Kansas, Nebraska, Mississippi, and Alabama? And for those five states who have Sour Patch Kids as your top candy? Pucker up.
The treats are fun but this week Cigna’s Evernorth subsidiary (which operates Express Scripts) finally bowed to the pressure exerted by President Trump and his administration to lower prescription drug costs by going after the middleman. Evernorth’s announcement that they are introducing a “transparent, rebate-free, pharmacy benefit services” to employers shows it doesn’t have to be Halloween to play tricks on patients, American taxpayers, and community pharmacy owners. The press release also says that “this new model will reduce the monthly cost for a brand-name prescription by an average of 30 percent.” That sounds pretty good except that the fees paid by pharma companies to PBMs averaged 42 percent in 2022. One large pharma company told me they are currently paying 68 percent of the list price of their drugs to PBMs in the form of rebates and other fees.
Other fees are key because so much focus has been put on rebates that now one of the PBMs’ most popular tricks is to say that they pass along all or a high percentage of rebates to plan sponsors. That sounds good. And if it was still 2015 that would be a lot more meaningful. But PBMs like to change the masks they hide behind to keep plan sponsors and the American taxpayer guessing. According to Nephron Research, nowadays, the big profit-drivers for PBMs are their specialty pharmacies (which is why they steer patients into their own pharmacies) and GPO fees. Remember the PBMs’ GPOs? Those are the scary offshore companies they created about six years ago to conjure up a new sleight of hand game that avoids pesky nuisances like United States regulatory oversight and taxes. The U.S. House Oversight Committee chaired by Rep. James Comer (R-Ky.) is currently investigating.
Specialty and GPO fees now account for over $20 billion in PBM profits compared to less than $5 billion in profit from rebates.
There are plenty of other tricks in Evernorth/ESI’s press release, like that this new way of doing business will only initially impact two million lives in 2027 and they will try to convince payers to change to this new model which might be sort of hard to do if employees are only saving 30 percent and pharma companies are paying significantly more in fees and rebates.
I’d be overlooking the Tootsie Roll center of the Tootsie Pop if I didn’t point out that the Cigna release also says they are “adopting a new reimbursement model that compensates pharmacies based on their cost for medications plus a dispensing fee and additional reimbursement for the essential clinical services they provide to patients.” According to the 2025 NCPA Digest, sponsored by Cardinal Health, the average cost of doing business per prescription is $15. That’s just to break even and doesn’t account for the additional value-added services community pharmacists provide that save patients, health care insurers, and American taxpayers money. The devil will be in the details.
Speaking of, that might be the appropriate costume suggestion for PBMs this Halloween.
Happy Halloween,
B. Douglas Hoey, Pharmacist, MBA
NCPA CEO
