Pharmacy Benefit Managers, Again - sigh
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Pharmacy Benefit Manager Update
Recall that PBMs are companies that operate a commercial health insurance drug plan. The take rebates (bribes) from drug makers to put drugs on the approved list (formulary) demand low reimbursements to drug stores, determine your copay, and often charge the insurance company far more than the reimbursement to the drug store. PS sometimes they offer the drug store less than their actual cost in a take it or leave it contract. Nice huh. Moreover, since they build the formulary, they are effectively telling the doctor which prescription is available to the patient. There have been hearings in Congress where an oncologist testified that due to certain genetic conditions the anti cancer medication on the formulary was the one most profitable for the PBM not the best drug to help cure her patient. Patient’s life now in jeopardy. They take money by the fistful and then deny coverage. What a charming business model.
Prescription drug spending by private health plans climbed to nearly $152 billion in 2021, an 18 percent increase from 2016. Health plans generally rely on PBMs to process claims, develop pharmacy networks, and negotiate rebates from drug manufacturers. However, some researchers and stakeholders have questioned certain PBM practices, such as PBMs retaining a share of the rebates and use of spread pricing. In response, states have begun to enact legislation addressing PBMs, with all 50 states having enacted at least one PBM-related law between 2017 and 2023.
Three PBMs control between 80% and 90% of all prescriptions involving insurance in the US. They are CVS Caremark, Optum RX and Express Scripts.
There has been an effort in Congress to regulate them. Remember that they are unneeded if we had a national single payer universal healthcare system like HR 3421. My own senator, Cantwell (WA), has written one bill. Bernie Sanders (VT) has another (better).
Some states are tired of waiting for federal legislation and so have implemented their own laws governing PBMs. On April 15th the General Accounting Office released a report reviewing those rules in 5 states. They studied 5 states that have laws to regulate these companies. We found, for example, that all 5 states regulated the companies' drug pricing and pharmacy payments—including by limiting companies' use of manufacturer rebates and their ability to pay pharmacies less than health plans are charged.
State regulators also shared lessons learned about pharmacy benefit manager laws. One suggested that emerging issues could be better addressed with broad regulatory authority than with specific provisions in laws.
Each of the five states selected for review—Arkansas, California, Louisiana, Maine, and New York—enacted a variety of laws to regulate PBMs.
Fiduciary or other “duty of care” requirements. Four of the five states (California, Louisiana, Maine, and New York) enacted laws to impose a duty of care on PBMs. The laws varied from imposing a fiduciary duty—that is, a requirement to act in the best interest of the health plan or other entity to which the duty is owed—to what state regulators described as “lesser” standards such as a requirement to act in “good faith and fair dealing.”
Drug pricing and pharmacy reimbursement requirements. The five states enacted a variety of laws relating to drug pricing and pharmacy payments, such as laws limiting PBMs' use of manufacturer rebates and their ability to pay pharmacies less than they charge health plans—a practice referred to as “spread pricing.”
Transparency, including licensure and reporting requirements. To increase the transparency of PBM operations, the five states enacted laws that require PBMs to be licensed by or registered with the state, or both, and to report certain information such as drug pricing, fees charged, and the amounts of rebates received and retained.
Pharmacy network and access requirements. The five states also enacted laws regarding pharmacy networks and patient access. Examples include laws prohibiting discrimination against unaffiliated pharmacies and limiting patient co-pays charged by PBMs.
The regulators GAO interviewed from selected states described lessons learned regarding PBM regulation. Examples include the following.
Regulators in four states said that providing regulators with broad regulatory authority was more effective than enacting specific statutory provisions. Doing so allowed regulators to address emerging issues without new legislation, according to regulators from one state.
Some regulators also stressed the need for robust enforcement of PBM laws and effective penalties to enforce them. Two pharmacy associations GAO interviewed concurred with these views, while a health plan association said that monitoring is needed to ensure compliance with PBM requirements. Three regulators also said that clear reporting requirements and definitions helped ensure consistent enforcement.
Summary/Advice
First, remember when you get a prescription filled - ASK THE PHARMACY Is this the cheapest way to get this medication? They will tell you if your copay is more than a discount program like GoodRX. Personally, I find that for most of my prescriptions, GoodRx or a similar discount - cash method is often cheaper than my copay - by a lot. The pharmacy won’t tell you - you have to ask.
PBMs squeeze the life out the healthcare system by taking money from everyone and providing necessary medications at outsized prices. They deny medications if they don’t make enough money on them. We either need to get rid of this business model or fix it. Fixing it one state at a time is possible but difficult and you know there are some states (mostly Republican) that view any regulation of any business as an act of Satan. So let’s tell Congress to get in gear.
ACTION
Let’s remind out members of Congress that 3 PBMs pretty much control the prescription drug world for most of us. They take bribes and cheat and pick a drug for you the benefits them, not necessarily the one your doctor thinks you need. You can find Senator’s contact info in the Resources section. Or use RESISTBOT by texting SIGN PYMKUF to 50409 to send the email below.
“I am your constituent and I am so tired of PBMs taking unfair advantage of those of us with health insurance. Their copays are often more than what a discount card price, they take bribes from drug makers to put medicines on the formulary the benefit them not the patient. They cheat pharmacies and health insurance companies.
I strongly urge you to pass Single Payer Universal Healthcare like HR 3421, the vastly improved Medicare For All Act, to eliminate the problem. If you can’t do that then pass PBM reform like S. 1339. Thank you.”
Resources
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Organizations to Contact
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Reproductive Health
NARAL - Pro Choice America
Charley. chatbot abortion resource - make sure to use a secure incognito browser if you live in a state that has banned abortion
Planned Parenthood
Miscarriage and Abortion Hotline has references about where to procure abortion medications. They also assist women in the process of self managed abortion or miscarriage by phone or text and will respond in an hour. Details and hours of operation at their website.
United State of Women Reproductive health page (bottom of the page) has important resources such as medical support, access to Telehealth, prescriptions by mail, and legal support references.
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Chop Wood, Carry Water by Jessica Cravens
RESISTBOT
Link to the RESISTBOT site to learn more
Link to Chop Wood, Carry Water RESISTBOT write up
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Any profit….anywhere….anything they can get away with.
No moral fiber.
As usual, clealy communicated, factual and solution focused. Thanks