We Need A Leash for Pharmacy Benefit Managers
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Pharmacy Benefit Managers (PBM)
Unlike the picture above, PBMs need to leashed but we the people should be holding the leash.
Yesterday a US Senate panel advanced a bill 26-0 that would require pharmacy benefit managers who are servicing Medicare Part D insurance programs and Medicaid to be subject to audits and to return kickbacks to the insurance companies. It also prohibits spread pricing for Medicaid prescriptions. Spread pricing occurs when a PBM charges an insurance plan (or an insurance plan charges plan participants) a price for a prescription drug that exceeds the price paid to the pharmacy for the drug.
Here is a link to the bill. It is S.2973 - Modernizing and Ensuring PBM Accountability Act.
This is an interesting tiny band aid that does not address the real problems for all 330 million of us. That problem is that between the pharmacy benefit managers and the drug manufacturers and the insurance companies, they have taken to jacking up the prices of drugs to cover bribes and kickbacks between themselves. When they do this they make sure that drugs that have extra financial incentives are covered on insurance plans while the ones that offer lesser bribes are not.
PBMs remind me of a scene from a Tolstoy novel where a party to a lawsuit in Russia bribes the judge. When the case goes against that party he asks the judge why and the response that the other party paid the judge more.
I favor instead Senator Sanders bill, S. 1339, The Pharmacy Benefit Manager Reform Act. It is far more comprehensive and limits more abusive PBM behaviors. This bill establishes various requirements for pharmacy benefit managers (PBMs) with respect to services provided to health insurance plans.
First, PBMs must report annually to the plan sponsor certain information about the PBM's services, including the amount of prescription drug copayment assistance funded by drug manufacturers, a list of covered drugs billed under the plan during the reporting period, and the total net spending by the health plan on prescription drugs. PBMs also must provide plan sponsors with a supplementary report every six months with specified information about drugs that were dispensed under the plan by pharmacies that are wholly or partially owned by the PBM.
Second, the bill prohibits spread pricing..
Finally, PBMs must remit to the plan sponsor all rebates, fees, alternative discounts, and other remuneration received from a drug manufacturer.
The bill establishes civil penalties for violations of these requirements and provides funding for the Centers for Medicare & Medicaid Services and the Department of Labor to implement the provisions of this bill. This bill would still allow CVS/Caremark/Aetna, are vertically integrated to have access to the bribes. So even this bill is not perfect.
Of course with Universal Healthcare we could spend this precious time talking about something else.
ACTION
Let’s let our Senators know we want Pharmacy Benefit Reform. Their contact info is in the Resources section below.
You can use RESISTBOT to send this message or use it as a sample text. Tex to 50409 SIGN PFCKGY.
“ I am your constituent and I want to make sure you know that pharmacy benefit managers are jacking up drug prices, and taking kickbacks to put drugs on insurance formularies. They use spread pricing (overcharging insurance companies or consumers) and squeeze pharmacists by forcing them to accept lower reimbursements in order to service a particular insurance plan’s customers. Overall this no longer serves the consumer at all.
There are several bills in Congress addressing this. I strongly favor S. 1339, The Pharmacy Benefit Manager Reform Act. It is not perfect, but it is the best of the lot. It is comprehensive in that it applies to all commercial insurance, as well as government insurance. Another bill, S.2973 - The Modernizing and Ensuring PBM Accountability Act is also making it’s way through the Senate. It only applies to Medicaid and Medicare Part D drug plans. Not as good.
I want reform and I want you to support S. 1339. If it is not going to come up for a vote then support S 2793. It’s a bandaid but we will take small steps as opposed to no steps in reform that we all deserve. Thank you.”
Kaiser Settles
Kaiser Permanente and a coalition of unions reached a tentative deal Friday morning, ending the largest healthcare labor dispute in U.S. history. The new contract aims to address staffing shortages with raises that will amount to 21% in wage increases over the next four years, to help retain current workers.
Claims Denial Success Story - Should Never Be This Hard
Here is a link to a story about a patient with stage 4 cancer, whose insurer refused to pay for the radiation treatment recommended. He had enough money to pay cash and then sue to recover. It took 5 years and a lot of effort to get a verdict. Now they are arguing over the amount of the payment. The insurance company wants to pay their discounted rate, not the amount the patient was charged. This is beyond the ability of most of us. Think Universal Healthcare.
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Chop Wood, Carry Water by Jessica Cravens
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Great article. We did pass some regulation or at least BPM s need to report to the Department of Commerce in Oregon.
It’s HB 3012 (in the oregon system called OLIS)
I didn’t write testimony, but at least someone is watching.