In 2017, the pharmacy benefit manager (PBM) Express Scripts announced a decisive move to curb the abuse of prescription painkillers, claiming it was taking action to mitigate the opioid epidemic that had become a major crisis in the U.S. The company said it was “putting the brakes on the opioid epidemic” by making it more difficult to access large quantities of these drugs.

This statement came in response to pressure from federal health authorities and was followed by similar declarations from the two other dominant companies that control prescription access for most Americans.https://wordpress.com/

However, these self-congratulatory announcements failed to address a key question: Why had these PBMs not acted sooner to address a crisis that had been unfolding for decades?

A New York Times investigation uncovered a significant reason: Drug manufacturers had been paying PBMs to avoid taking action.

For years, PBMs, such as Express Scripts, received payments from opioid manufacturers like Purdue Pharma in exchange for not imposing restrictions on opioid distribution. While tens of thousands of Americans were overdosing and dying from prescription painkillers, these middlemen were raking in billions of dollars in rebates.

The investigation, which involved reviewing hundreds of previously confidential documents, sheds light on a largely hidden chapter of the opioid crisis and offers a rare glimpse into the workings of the companies controlling the prescription drug supply chain.

PBMs wield tremendous power over which drugs are covered by insurance plans and at what price. The three largest companies—Express Scripts, CVS Caremark, and Optum Rx—manage prescriptions for over 200 million people and are part of healthcare conglomerates that rank among the top companies in the Fortune 500.

Hired by insurers and employers to manage drug costs, PBMs negotiate discounts with pharmaceutical companies. However, a recent investigation by The Times found that PBMs often prioritize their own financial interests, sometimes increasing costs for patients, employers, and government programs, while driving independent pharmacies out of business. The largest PBMs have faced accusations of anticompetitive behavior.

The deals between PBMs and opioid manufacturers highlight an often-overlooked consequence of the pharmaceutical industry’s “pay-to-play” system: virtually every aspect, including safeguards against abuse, can be negotiated for the right price.

PBMs exert control as gatekeepers, shaping the drug formularies that determine which drugs are covered by insurance plans. Drugmakers compete for placement on these formularies by offering rebates, most of which PBMs pass on to their clients but also retain a portion for themselves.

These formularies often include restrictions to steer patients toward cheaper alternatives. For certain drugs like opioids, these restrictions can also serve a medical purpose—reducing the risk of overdose, addiction, and diversion to the black market. Yet, as the documents reveal, PBMs frequently sacrificed these safeguards in exchange for rebates.

Purdue’s strategy to maximize access to its blockbuster drug OxyContin was explicit: “Offer rebates to remove payer restrictions,” according to internal documents. Purdue sought to avoid requiring doctors to provide additional justification for prescribing the potent drug and to eliminate limits on the number of pills dispensed.

This approach worked. Purdue proudly reported that prescribers and patients faced minimal to no restrictions on OxyContin access.

What could have been a safeguard against overprescribing instead became a sales tool. After striking deals with PBMs, drug manufacturers promoted the lack of restrictions as a selling point to encourage doctors to write more prescriptions.

As the opioid epidemic worsened, the PBMs’ earnings continued to grow. The largest PBMs acquired competitors, using their increased leverage not to impose safeguards, but to demand even higher rebates and fees. From 2003 to 2012, for instance, the rebates Purdue paid to PBMs doubled to around $400 million annually, mostly for OxyContin.

The documents reviewed by The Times, spanning over two decades, provide an unprecedented look into the backroom deals between drugmakers and PBMs, exposing the financial interests that fueled the opioid crisis.

PBMs control drug access and pricing by negotiating formulary placement, making them key players in the crisis. They exert control over the drugs patients can receive, creating a financial incentive for insurers not to impose restrictions.

When it came to OxyContin, Purdue leveraged rebates to prevent insurers from imposing restrictions. In 2003, Purdue executives celebrated successful efforts to influence insurers to lift restrictions on the drug, even as concerns about its abuse mounted.

Purdue’s internal documents show how rebates were central to the company’s strategy, with executives acknowledging that the rebates were key to overcoming restrictions and enabling broader distribution of the drug.

In 2003, when UnitedHealthcare raised concerns about OxyContin prescriptions, Purdue turned to Merck-Medco, one of the largest PBMs at the time, to help remove restrictions on OxyContin. The PBM’s presentation about the financial loss in rebates convinced the insurer to ease its limits.

In addition to Purdue, other manufacturers like Mallinckrodt also adopted similar strategies, working with PBMs to prevent restrictions on their drugs. As the opioid crisis grew, drugmakers understood that maintaining access to their drugs without limitations required financial incentives for PBMs and insurers.

By 2012, Purdue was paying nearly $50 million annually in rebates to keep OxyContin on the list of approved drugs for certain Medicare plans. Despite growing concerns about abuse, Purdue was willing to increase its rebate payments to prevent restrictions that could threaten sales.

Meanwhile, Optum Rx and other PBMs used their bargaining power to demand even higher rebates. This cycle continued for years, with PBMs becoming more entrenched in their role as middlemen who facilitated the widespread distribution of opioids.

However, in 2016, the Centers for Disease Control and Prevention (CDC) issued guidelines cautioning against high doses of opioids. Pressure mounted from regulators to limit opioid prescriptions, leading PBMs to reluctantly introduce restrictions.

By 2017, Express Scripts and other PBMs began charging clients to offset the financial impact of restricting opioid access. Optum Rx also faced pressure to delay restrictions to avoid violating contracts with Purdue, which still provided lucrative rebates.

Ultimately, these restrictions were introduced, though they came too late to prevent much of the damage. The PBMs publicly claimed success in reducing inappropriate opioid prescriptions, but behind the scenes, the negotiations with Purdue and other drugmakers continued to shape the availability of these drugs.

As the crisis continued, some PBM executives expressed frustration over the long-standing practices that had contributed to the epidemic. In internal emails, Optum Rx’s David Calabrese decried the overprescribing of opioids and the enormous toll it had taken on American lives.

Yet, despite the growing urgency, the PBMs’ financial relationships with opioid manufacturers persisted, continuing to prioritize rebates over patient safety until public and regulatory pressure forced change.

In the years following the CDC’s guidelines, PBMs like Express Scripts and Optum Rx started introducing more restrictions, including prior authorizations and dosage limits. These changes were touted as successful, but the full extent of the PBMs’ role in perpetuating the opioid epidemic remained largely hidden for years.