Meet the unknown middlemen who affect drug access and prices
My patient’s rheumatoid arthritis had been stable for 19 years when her insurer opted to deny the medication that had restored her life. The insurer had determined that she now needed to try a different medicine instead. What could possibly be the rationale for that decision?
Much attention is given to the high cost of prescription drugs. Those discussions don’t often involve the sanctity of the patient-physician relationship, but they should. Increasingly, the large companies that impact virtually every aspect of pharmaceutical access are dictating which prescription medicines patients can receive and their cost. They are inserting themselves between doctors and patients, imposing their financial objectives over what is best for patient health. It’s a worsening situation in need of solutions.
Pharmacy benefit managers are corporate middlemen who are hired predominantly by insurance companies and government programs to manage a plan’s prescription drug benefit. They claim that they negotiate lower prices of prescription drugs for patients. This sounds good on paper but, in reality, this system has morphed over time into an opaque game rigged against patients, physicians, and consumers.
PBMs are responsible for developing drug formularies which define what medications a patient can access, what a plan pays for a drug and what a pharmacy is reimbursed for that drug. The PBMs also negotiate “rebates,” i.e kickbacks, from the pharmaceutical companies, which go directly into PBM pockets. These rebates are based on a percentage of the list price of a drug, creating the perverse incentive for PBMs to favor higher-cost drugs because it means they get bigger rebate checks. Because PBMs also control the formularies that determine which medicines receive insurance coverage, they can give preference to those products for which they receive kickbacks and keep others off the formulary. A common result is that a medication recommended by a doctor may be inaccessible or unaffordable to the patient. Formulary decisions are based significantly on these rebates, regardless of cost and/or benefit to the patient. In this way, PBMs, especially the three PBM corporations that control 80% of the prescription drug prescribing marketplace, have disrupted the patient-physician relationship.
This is what happened with my patient. When the rebates for particular drugs changed, so did the formulary. It didn’t matter that my patients’ rheumatoid arthritis was well managed on her current regimen. With an incentive program allowing kickbacks for PBMs, what is best for the patient becomes merely a footnote.
For too long, the PBMs have been able to run roughshod with these practices with minimal transparency and virtually no oversight. Thankfully, there is the possibility that the scales may be coming into balance.
There are two pieces of bipartisan legislation introduced in the U.S. Senate by Sen.Maria Cantwell, D-Washington, and Sen. Chuck Grassley, R-Iowa, the Prescription Pricing for the People Act and the Pharmacy Benefit Manager Transparency Act that would take some important first steps. Among several actions that would hold PBMs more accountable for deceptive business practices, the legislation would ensure that an already-launched Federal Trade Commission investigation focuses on those abusive, anti-consumer PBM practices. This would break through the opaque shield hiding PBM operations from scrutiny, and stop unfair pricing practices.
However, more needs to be done. Policymakers need to break the linkage between PBM fees and the price of a drug. PBMs shouldn’t make more money by forcing higher priced drugs on patients. There should be guardrails in place to ensure that the savings PBMs negotiated with pharmaceutical companies are shared with consumers at the pharmacy counter. Furthermore, there needs to be transparency with regard to the financial dealings of PBMs. That transparency is not currently present.
As Congress and state legislatures consider how to make prescription drugs more affordable, they also need to ensure that physicians can do what is right and necessary for their patients without interference from powerful corporate interests. No patient should be harmed because a company’s quarterly earnings took precedence over their health and well-being.
By the way, my patient finally got her medicine, but only after a battle with her insurance company. Physicians shouldn’t have to fight so that patients can receive proper care but more importantly, patients should not be denied proper care due to corporate incentives.
Mark Lopatin is the 2nd district trustee for the Pennsylvania Medical Society and the author of “Rheum for Improvement — The Evolution of a Health-Care Advocate”
This article originally appeared on Bucks County Courier Times: pharmacy benefit managers need to be accountable
