Encore! EP288: The "Big Three" PBMs Spinning Up GPOs—What? With Mike Schneider

In this encore episode, Stacey Richter talks with Mike Schneider about the "Big Three" PBMs — Express Scripts, Optum, and CVS Caremark — spinning up their own group purchasing organizations (GPOs) to negotiate rebates with pharma companies. Traditionally, GPOs negotiated volume discounts on drugs and supplies for hospitals and providers; now these new PBM-owned GPOs, several based overseas in places like Switzerland and Ireland, are the entities negotiating rebates directly with pharma — sidestepping domestic rebate pass-through rules aimed at PBMs.

WHAT YOU'LL LEARN

✅ Why the "Big Three" PBMs each set up their own GPO — Ascent (Express Scripts), an Ireland-based Optum operation, and Zinc (CVS Caremark)

✅ How these new GPOs differ from traditional GPOs, and why they now sit between PBMs and pharma companies for rebate negotiations

✅ Why an executive order requiring PBMs to pass through rebates to patients doesn't apply to GPOs, especially ones based overseas

✅ How the "Big Three" PBMs compete with each other and how employers choose between them

✅ Why one of the biggest beneficiaries of the rebate system as a whole may be the government itself

WHY THIS MATTERS

The PBM world as a whole is not very transparent, and moving rebate negotiations into GPO entities — some based in Switzerland and Ireland — makes that transparency problem worse, not better. It's a tangled web: rules designed to force PBMs to pass rebates through to patients don't say anything about GPOs having to do the same.

MENTIONED IN THIS EPISODE

Encore! EP216 with Chris Sloan: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

🔗 Healthcare Industry Acronyms and Terms

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00:00 Introduction

02:48 What does a GPO add to a PBM?

05:23 Rebates vs driving more revenue.

10:39 PBMs vs safe harbors.

12:25 The net impact on the commercial side.

14:07 PBMs vs pharmaceutical manufacturers.

14:54 How the "Big Three" PBMs compete with each other, and how employers would choose between them.

15:56 What the net-net is here.

18:06 How PBMs are shifting their models.

20:42 How GPOs may be making things even less transparent.

21:31 "The PBM world as a whole is not very transparent."

25:00 "One of the biggest beneficiaries of this whole rebate [system] is the government."

25:46 "The question is, 'Who's paying those costs?'"

26:02 Encore! EP216 with Chris Sloan.

27:00 A better way to move money from Pharma to employers and plan sponsors.

28:04 "Put your money where your mouth is."