Government, Industry Leaders Address the Growing Issue of PBM Practices
Health care professionals, industry leaders, and politicians gathered for a virtual roundtable to discuss the state of the PBM industry.
Scrutiny of pharmacy benefit managers (PBMs) and their practices is nothing new. But since the Federal Trade Commission (FTC) launched an official investigation into PBM practices in February 2022,1 PBM reform has been thrust into the spotlight on a national level, with everyone from independent pharmacy owners, pharmacist advocacy groups, regulators, and lawmakers joining the conversation.
But despite the growing criticism of PBMs, most legislation on drug price transparency has yet to pass.2
On March 4, 2024, a group of government officials, pharmacists, and industry experts gathered for a panel discussion hosted by the White House to continue the conversation on PBMs, their financial practices, and the importance of PBM reform.3
PBM practices are negatively impacting independent pharmacies across the United States. | image credit: MQ illustrations - stock.adobe.com
According to a survey from the National Community Pharmacists Association (NCPA), there are 3 PBMs causing the most distress for local pharmacists in America: Cigna’s Express Scripts, CVS/Caremark, and UnitedHealth Group’s OptumRx.2
These are the same 3 PBM groups that control 80% of the prescription drug marketplace, according to Dared Price, a member of the NCPA Board of Directors, president of the Kansas Pharmacists Association, and a pharmacy owner in South Central Kansas.3
Supply chain issues—which trickle down to a cost detriment for local pharmacies—are an effect of PBMs’ predatory practices toward both independent pharmacists and patients seeking affordable medication. The main practices allowing PBMs to drive drug costs include spread-pricing, take-it-or-leave-it contracts, and the idea of operating in the shadows and minimizing consumers’ curiosity on drug pricing.3
“The stakes of corporate monopolization are highest in health care,” Price added.3 “Despite the enormously consequential role that they play, PBMs often operate in complex and opaque ways that have let them fly under the radar.”
“As more communities’ pharmacies go under, and as patients continue to pay unacceptably high prices for prescription drugs, we are more determined than ever to understand how PBMs could be causing these problems in the drug supply chain,” said FTC chair Lina M. Kahn.3
As an antithesis of transparent drug pricing, the roundtable speakers quickly identified “opaque” as a popular buzzword to explain PBM practices.3 Chichi Ilonzo Momah, PharmD RPh, an independent pharmacy owner in Pennsylvania, also discussed the opaqueness of PBM language toward patients.
“Our patients are getting misleading letters from PBMs with vague—and I heard you say opaque—and complex language about where and how to fill their prescriptions,” said Momah.“These misleading letters steer patients away from community pharmacies and force them to use mail order or large retail pharmacies owned by these PBMs.”
READ MORE: Class Action Lawsuit Filed Against CVS Health, Caremark, Aetna to Recoup DIR Fees
After hearing from some of the independent pharmacists, advocacy groups, and government officials leading the charge in PBM reform, the discussion moved to a newcomer in the prescription drug supply chain.
“I apologize in advance for being a little bit coarser than my fellow panelists, but duty calls,” said Mark Cuban, co-founder of Cost Plus Drugs.3
Cuban went on to explain how industry-leading PBMs have placed stock price over affordable public health care—something that panelist Andy Beshear, Governor of Kentucky, and millions of Americans agree is a basic human right.3 Cuban also shared his view that PBMs are “everything that is wrong” with the prescription drug industry.
Further discussing how PBMs “operate in the shadows,” Cuban explained the slippery slopes associated with working under PBM control.
“The number one rule when contracting with PBMs is that you don't talk about the PBMs and their contracts. Whether provider, manufacturer, employer, or non-affiliated pharmacy, they prevent making public or discussing their pricing terms or any aspect of their contracts. And if you do, they're happy to sue you,” Cuban said.
Like Dared Price’s Oread Rx—offering patients prescription benefits built by pharmacists—Cuban finished with what his company is doing to make prescription drugs more affordable.
“There is not a single thing that those big 3 PBMs do that is unique, or [that] can’t be replaced” by an independent pharmacy, Cuban noted, or by Cuban’s own company.3 “We buy drugs and we sell drugs; no rebates, no magic, no complications. We keep our business simple, which allows us to keep our pricing so low.”
Are you looking for ways to stay on top of the latest developments in the fight for PBM transparency? Check back regularly for our coverage of the issues.
References
1. FTC launches inquiry into prescription drug middlemen industry. Federal Trade Commission. June 7, 2022. Accessed March 4, 2024. https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-launches-inquiry-prescription-drug-middlemen-industry
2. Local pharmacies on the brink, new survey reveals. Press release. National Community Pharmacists Association. February 27, 2024. Accessed March 4, 2024. https://www.ncpa.org/newsroom/news-releases/2024/02/27/local-pharmacies-brink-new-survey-reveals
3. Roundtable on lowering healthcare costs and bringing transparency to prescription drug middlemen. White House webinar. March 4, 2024. Accessed March 4, 2024. https://www.youtube.com/watch?v=DiA6hAslOFg
FDA’s Recent Exemptions: What Do They Mean as We Finalize DSCSA Implementation?
October 31st 2024Kala Shankle, Vice President of Regulatory Affairs with the Healthcare Distribution Alliance, and Ilisa Bernstein, President of Bernstein Rx Solutions, LLC, discussed recent developments regarding the Drug Supply Chain Security Act.
