Pharmacy Benefit Dementors
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Dementor Pharmacy Benefit Managers
We attended a Kaiser Family Foundation Webinar yesterday on Pharmacy Benefit Managers (PMB). Here is a link to a previous news letter we’ve done on them.
The panelists in the webinar were Jennifer Reck, Director, Center on Drug Pricing, National Academy for State Health Policy and Karen Van Nuys, Executive Director of the Value of Life Sciences Innovation Program and Senior Fellow, University of Southern California Schaeffer Center for Health Policy and Economics.
Let’s recall how it works. PBMs execute the pharmacy benefit that insurance programs offer for a fee from the insurance company. The build formularies of drugs that are covered by your insurance. If it isn’t covered, you pay for it out of pocket. They collect rebates/bribes from drug makers to get the drug onto the formulary so more of the drug will sell. The drug company has to raise list prices (paid by some without insurance) to make sure they take in enough money because they have to pay the rebates/bribes. The PBM collects the copay from the pharmacist, allowing the drugstore to keep some for their costs. They can negotiate claw back amounts from the drug store so that when some drugs are sold on insurance the pharmacist actually takes in less than the drug costs them. These guys stink on ice.
Here is some of the data presented at the webinar. Most of the proposed federal legislation addressing PBMs has them forfeiting rebates (bribes) to someone. Sometimes it is HHS, sometimes the insurance company, sometimes the insurance policy sponsor (like a union or trade group or employer). Senator Sanders’ S. 1339 is that one and is the best of the lot. None have the rebates go to policy holders. Currently, about 90% of all rebates actually pass through to someone. Bad news, most PBMs have gotten rid of most rebates, they have new names now, like fees and they keep those.
Since 2017 there have been 280 laws enacted regarding prescriptions at the state level. 150 of them are related to PBMs. All 50 states have PBM legislation of some sort. Many of these laws are bipartisan.
30 states ban gag-language in the contracts PBMs have with pharmacies that prohibit pharmacists from telling customers that their insurance plan is not the cheapest way to buy the drug.’
A study was performed regarding the cost of drugs to Medicare. This employs Medicare Part D, which is private insurance and so PBMs are involved. The researchers compared the Costco cash price (no insurance) to what Medicare paid for over 100 drugs and found that Costco was 20% cheaper.
These are dementors that are sucking the money and life out of healthcare. They stand between us and our doctors to determine what drugs are available to us. Universal Healthcare, like HR 3421, will take care of this because the negotiation with drug companies is built in and the PBMs are out. If we can’t have that today then we should at least have S. 1339, Senator Sanders bill for PBM transparency, a baby step in the right direction. Expecto Patronum.
ACTION
Use RESISTBOT (text SIGN PCLNZZ to 50409) or call or email your Congressional Representative and Senators and the President (their contact info is in the References Section) and tell them something like:
“My name is [name] and I live in [zipcode] and I am your constituent. I am very concerned about PBMs and how they have gamed the system. They build formularies of drugs covered on an insurance plan and take bribes/rebates/fees from drug makers to cover specific drugs. A recent study, at USC, has shown that cash prices at Costco are less than what Medicare has to pay with PBMs involved. It is of course no different for any private insurance since PBMs are involved. All of this waste and abuse that PBMs have built into the system go away with Universal Healthcare like HR 3421 or S. 1655, so I want you to actively support those. Until then, support Senator Sanders PBM transparency bill 1339. You were elected to help us, not people who stand between us and our doctors and our health. Just do it.
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