UC is not alone in trying to find a solution to drug inflation. CalPERS is facing the same problem. However, it doesn't have its own health enterprise the way UC does, so it is seeking a contractual arrangement with its PBM that shares risk. From the Sacramento Bee:
Over the next five years, the California Public Employees Retirement System hopes to save $600 million through a new contract with an intermediary that manages state workers’ and their families’ pharmacy benefits, with the goal of minimizing rising drug prices and stabilizing premium costs. Earlier this month, CalPERS announced a new agreement with CVS Caremark to serve as the pharmacy benefits manager (PBM) for 587,000 CalPERS members. That represents about 40% of the 1.5 million active and retired state workers and family members who are enrolled in the system’s HMO and PPO plans...
To ensure CVS Caremark maintains reasonable pharmaceutical costs that don’t exceed a projected 6.5% cost trend, the company agreed to put millions of dollars at risk. If CVS Caremark doesn’t meet quality goals for treating patients with high blood pressure and diabetes, it will also have to compensate CalPERS. Over the five-year contract, CVS Caremark is putting $250 million at risk...
Full story at https://www.sacbee.com/news/politics-government/the-state-worker/article311498801.html.
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Note that were UC to create an internal PBM, it would have no one to shed risk to. If UC penalized its own PBM, it would effectively be penalizing itself. Yours truly is not arguing that therefore creating an internal PBM would inherently be a bad thing. But he does suggest that the issue is more complicated than assuming that an internal PBM will automatically fix the drug cost problem.
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*https://uclafacultyassociation.blogspot.com/2025/07/uc-health-considering-forming-its-own.html.
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