Are Pharmacy Benefit Managers creating conditions for criminals in the safe supply chain?

Over the past decade, PBMs have been cutting the reimbursements pharmacies receive for the medicine they dispense to insured patients into smaller and smaller amounts. In many places, those reimbursements don’t fully cover the acquisition cost of medicine.

Pharmacies now routinely dispense medication that they lose money on. This is by design. A pharmacist sent us the 2024 contract for a major PBM and it shows that dispensing brand name medicines is compensated at a rate of “average wholesale price minus 25.5%.”

This situation has created a demand for pharmacies to seek vendors who will sell them medicine at a discount, and an opportunity for criminals to enter the legitimate supply chain if they're clever enough to pose as real wholesalers. We asked pharmacists to share their receipts with PSM to show both what they paid for a medicine from their distributor and how the PBM reimbursed them. We found that PSMs are reimbursing pharmacies for less than the cost of medicines, which makes pharmacy buyers trying to keep their businesses afloat perfect targets for criminal counterfeiters trafficking diverted and counterfeit medicine.

Learn more in our longer blog post at https://www.safemedicines.org/2024/02/pbmblackmarket.html.