Tyson Foods Ditches Their Mega-PBM In Favor of an Upstart ‘To Really Get a Partner’

Tyson Foods has 140,000 employees, which is a huge number of people in most contexts, but not that big a number, if we’re being honest, in the context of U.S. health care. Express Scripts claims to have a line in on 100 million covered lives. 

Still, Tyson’s decision to drop CVS Caremark — one of the “big three” PBMs — in favor of a startup (Rightway) is notable. Tyson itself isn’t a tipping point, but it’s certainly a sign that there might be a tipping point. Maybe. At some point in the future. 

The CNBC story on the Tyson decision is worth the read, because it gets into some of the nuances of why Tyson ditched CVS Caremark. 

Here’s how Renu Chhabra, who is head of global benefits at Tyson, put it: “I wanted to look at Humira, and I wanted to see what the acquisition cost was. And then I wanted to understand what Tyson was paying for that; it was very difficult to get to those numbers. Part of this was to really get a partner who can help us organize the information, make sure we understand how to manage specialty, and really looking at how to get the best net cost.”

One of the points Mark Cuban makes all the time is that PBMs feast off of the fact that employers can’t — or don’t want to bother — examining the underlying health-benefits math. If they did, Cuban argues, they’d manage their benefits a lot differently. (This Relentless Health Value podcast with Cuban is a summary of this worldview.)

It feels like the Tyson example is an exemplar of that: the execs finally decided to look under the hood and, once they did, they didn’t like what they saw.

Yesterday, I flagged an illuminating BioCentury piece about how Arnold Ventures is seeking to influence the policy debate by taking a smart “portfolio” approach to every piece of the public policy puzzle, from foundational research all the way to political advertising. 

It’s not news that John Arnold is trying to shift the debate — he was in DC yesterday, doing the work directly — but seeing the playbook laid out is always helpful. 

One of the points I highlighted yesterday was Mark Miller’s repeated claim that net drug prices aren’t flat or falling. Miller, the EVP of health care at Arnold Ventures, said that he doesn’t believe the drug industry on net prices because other stats, such as those from MEDPAC, show a different phenomenon. 

But Adam Fein reminded me that we’ve been through this before: MEDPAC’s net price estimates are fatally limited (as Adam noted here). And Adam pointed out that Arnold grantees have no problem creating research and using data that shows the declining net price trend.

Arnold does not employ unserious individuals, so it’s hard to conclude that Miller’s comments are anything other than trolling. Getting the pharmaceutical industry worked up generally seems like a good play from a public perception standpoint. (In that case, given that I’ve written hundreds of words on this now over the past couple of days: well-played, sir.)

But, perhaps, denying the reality of what’s happening with net prices is a less-than-ideal way of creating a shared reality upon which to base policy dialogue.

While we’re talking about PBMs … here’s a press release from Chuck Grassley telling the FTC to hustle up and finish its investigation of the PBM industry already. Here’s Politico’s roundup of 2023 lobbying, showing how PBMs started pouring serious dollars into the DC. And here’s Modern Healthcare’s take on the current arguments around existing PBM reform legislation. 

The Maryland PDAB should have a preliminary list of medicines that it wants to probe next week, and it has the goal of creating a list of “unaffordable” drugs by this autumn, according to this update by Maryland Matters. Still unclear, however, is what the group will do once it makes that “unaffordable” designation.