The report, a study of 8.3 million enrollees in the Federal Employees Health Benefits Program (FEHBP), examined three FEHBP PBM that account for approximately 55% of the people covered under the program as of July 2002. From the results, the GAO concluded the PBMs achieved savings for FEHBP-participating health plans by using three key approaches:
- Obtaining drug price discounts from retail pharmacies and dispensing drugs at lower costs through their mail-order pharmacies
- Passing on certain manufacturer rebates to the plans
- Using intervention techniques that reduce utilization of certain drugs or substitute other, less costly, drugs.
Additional savings were realized through manufacturer rebates paid to FEHBP and drug utilization control programs. The report specifically noted that:
- PBMs obtained average prescription drug prices from retail pharmacies that were 18% lower for brand name drugs and 47% lower for generic drugs than the price paid to retail pharmacies by customers without prescription drug coverage
- The average PBM mail-order pharmacy price for prescription drugs was 27% lower for brand name drugs and 53% lower for generic drugs than the price paid to retail pharmacies by customers without prescription drug coverage
- D rug manufacturer rebates obtained by the PBMs for the client reduced total drug spending by the federal government an additional 3% to 9%