Pharmacists warn Tennessee patients to protect themselves against benefit managers
Out-of-pocket drug costs are rising across the nation, and many Tennesseans struggle to afford their prescription medications.
Patients and their local pharmacies are increasingly under attack by multibillion-dollar corporate middlemen called pharmacy benefit managers (PBMs), which are third party administrators that manage prescription drug formularies on behalf of insurance companies.
Although PBMs were created to control prescription drug prices, they now exert tremendous control over which medications Tennesseans can receive, where to get them, and how much they cost. And unfortunately, most people don’t even know they exist.
Pharmacy benefit managers put profits ahead of patients
In 2022, Tennessee adopted Public Chapter 1070 to help regulate PBMs by establishing fair contracting and pharmacy audit protections; ensuring patients can use the pharmacy of their choice; and establishing increased transparency and fair reimbursement for medication costs. All are important measures to help patients and pharmacists alike.
Additionally, the Federal Trade Commission (FTC) recently launched a formal study into PBMs to investigate and “scrutinize the impact of vertically integrated pharmacy benefit managers on the access and affordability of prescription drugs.” Since the study’s launch, the organization unanimously voted to issue a statement withdrawing its previous advocacy statements for PBMs, remarking that those statements “no longer reflect current market realities.”
The Tennessee Pharmacists Association (TPA), the only professional association representing pharmacists across the state, has been working tirelessly to ensure PBMs follow the new law and are held accountable for the harm they pose to patients and pharmacies. As part of their efforts, they have been instrumental in offering legislative leadership perspectives to the PBM issue in Tennessee and have shared valuable insights and ramifications with the FTC’s recent investigation.
Since they’ve been historically unregulated, PBMs, specifically the three largest – CVS/Caremark, OptumRx, and Express Scripts, have gained enormous market share through unfair and anti-competitive business practices that put pharmacies and the patients they serve at risk. Something needed to be done and I commend our legislators for acting.
Although the PBMs were originally created to help manage drug costs, their focus has instead become finding new and hidden ways to increase the cost of medicines for their own benefit. The drug pricing system involves an extremely complex process on which few patients, providers, and legislators are educated, and which allows PBMs to increase profits at the expense of patients with limited repercussions.
PBMs routinely put profits before patients and the pharmacists that serve them.
How you can take control of your relationship with the pharmacist
To help protect Tennesseans’ health and wallets, here are four common PBM tactics patients and employers should look for, along with how best to combat them:
PBMs limit prescription medication options on their “formulary”: According to the PBM Accountability Project, PBMs excluded 846 drugs from their formularies in 2020. PBMs often remove low-cost generic prescriptions covered by insurance and instead steer patients to higher priced medications. Patients should contact their local pharmacist directly to verify which prescriptions are available and discuss the best and lowest priced alternatives.
PBMs require you to use PBM-owned pharmacies: PBMs often steer patients to their own mail-order pharmacy at the risk of the patient facing higher copay amounts for their medications. Under the new law, PBMs cannot restrict a patient's choice in which local pharmacy they patronize. Instead, patients can choose the pharmacy that they know and trust, especially when that pharmacy is located closest to their home. If your ability to choose your own pharmacy is being infringed upon, contact the Tennessee Department of Commerce and Insurance to file a complaint at: www.tn.gov/commerce/insurance/pbm/complaint.
PBMs use the “spread pricing” or “claw back” method: Spread pricing occurs when PBMs charge health plans higher prices than what they reimburse to the pharmacy, leading to higher costs for the plan sponsor and increased premiums and copays for patients. If the copay is higher than the ultimate reimbursement to the pharmacy, PBMs “claws back” the excess copay from the pharmacy and keep it as a profit. Employers should review reimbursement data to ensure PBMs are delivering on their contractual obligations. PBMs are not allowed to reimburse pharmacies less than the actual cost.
PBMs attempt to collect additional fees: PBMs often line their pockets by charging increased or new fees directly from manufacturers. These fees are often hidden from health plans and patients. Employers should have their health plan showcase how their PBM is passing these savings back to your company.
For many years, Tennessee’s pharmacists have played a critical role in serving patients’ needs and providing access to life-saving medications. A lack of transparency in PBM practices led government officials to pass Public Chapter 1070, but it’s now up to pharmacists and their patients to hold them responsible and ensure accessible and affordable healthcare for all.
Anthony Pudlo, PharmD, MBA, is the executive director at the Tennessee Pharmacists Association (TPA), the leading professional association in the state representing pharmacists and the profession of pharmacy. He can be reached at anthony@tnpharm.org.
This article originally appeared on Nashville Tennessean: Pharmacy benefit managers: Ways patients can protect their pocketbooks
