Advocacy group argues patients steered toward drugs that maximize profits
Pharmacy benefit managers (PBMs) are blocking patients from receiving the best and sometimes cheaper drugs because they steer them to those that maximize profits, according to a patient advocacy group that says they help drive up prices.
Dr. Robert Goldberg, a co-founder and vice president of the Center for Medicine in the Public Interest (CMPI), said PBMs' claims that they are keeping down prices are largely not true. And the industry is now dominated by three big PBMs that control a large part of the market, Goldberg told Patient Daily.
Goldberg recently produced a short video featuring a woman who claims she had to fight for the right medication for her rheumatoid arthritis (RA). The fight involved PBMs and insurance companies.
In the fractious national debate over the cost of the drugs, Goldberg agreed with the characterization as a "shouting match" involving pharmaceutical companies, the middlemen, insurance companies, politicians and others.
But his movie, which is featured on the organization's website, was designed to put the patient first, highlighting the problems some people have accessing the right medication at the right price.
PBMs do not believe they are the central cause of the problem, arguing that the drug companies set the prices. In a recent letter to Health and Human Services Secretary Tom Price, Pharmaceutical Care Management Association (PCMA), the industry group for PBMs, said increased competition will reduce prices.
"Three large PBMs control 78 percent of the market and use this market power to control what medicines people can use, what they ultimately will pay and where they can access their prescriptions," Goldberg said.
At one point there were dozens of PBMs, but the industry has consolidated. Those three largest are Express Scripts, CVS Health and United Health/OptumRx.
"PBMs use their control over access and price to 'steer' patients to the medications that generate the largest financial rewards for the PBM," Goldberg added. "PBMs require doctors to seek approval for medicines that they do not cover or do not favor."
PBMs disagree that they help increase prices and argue they help to keep them down because of their ability to negotiate with drug companies.
Addressing the debate over the Affordable Care Act, Goldberg said the focus is, in part, on preserving protections for people with pre-existing conditions.
"But under current law, pharmacy benefit management companies and health plans are violating that provision every day, making nearly $50 billion by discriminating against a tiny group of seriously ill patients," Goldberg said. "PBMs and insurers claim they reduce the price of specialty medicines by negotiating cash rebates with pharma companies in exchange for covering their products. In fact, they pocket those rebates and require patients with cancer, RA, MS and many rare diseases to pay a percentage of the retail price."
Goldberg added, "PBMs and health plans could use rebates to reduce cost sharing. Instead, they systematically maximize their use for the sickest patients. They do it because they can and because by doing it, they rake in tens of billions of dollars in a predictable manner."
PCMA, in its letter to Price, included recommendations to reduce prescription drug costs.
The industry group said that PBMs are open to sharing information about rebates with payers to reveal how these are used to bring down the costs of premiums. But reducing costs requires increased competition among drugmakers, the letter stated.
“In order to understand which policy solutions will reduce prescription drug costs, policymakers must first understand how drug pricing works and how PBMs help reduce costs for payers and patients,” PCMA President and CEO Mark Merritt said in a press release.
Rep. Cathy McMorris Rodgers, chair of the House Republican Conference, said she firmly believes in bringing oversight and transparency to PBMs.
"Patient access to quality, affordable medications is a critical component of our health care system," McMorris Rodgers told Patient Daily in a statement. "There’s no such thing as one solution to this problem, but I firmly believe we must bring oversight and transparency to PBMs."
McMorris Rodgers said PBMs are hurting small community pharmacists by "hiding the costs of prescription drugs, reimbursing pharmacies at rates well below their acquisition costs, and at times retroactively clawing back payments."
Organizations in this story
Pharmaceutical Care Management Association 325 7th St NW Washington, DC - 20004