The National Community Pharmacists Association (NCPA) has penned a strongly worded letter to President Donald Trump's administration, claiming middlemen in the supply chain are hiking up the price of drugs and offering what it says is a technology-based solution that could cut the cost of drugs to consumers.
But pharmacy benefit managers (PBMs) offered a robust defense of their role in the drug supply chain, arguing they play a key part in reducing costs.
NCPA Public Relations Director John Norton told Patient Daily that independent community pharmacists believe there is a lack of transparency and oversight of PBMs, and called on the new administration to aggressively scrutinize the industry.
It is “a detriment to a system for delivering prescription drugs that sees prices escalate constantly,” Norton said. The three largest PBMs — Express Scripts, CVSHealth and OptumRx — cover more than 180 million Americans, or roughly 78 percent of the market, Norton said. That sort of market consolidation is troubling.
“Since 1987, when Advance PCS/Caremark (now CVSHealth) became the last of the original 'Big 3' PBMs to incorporate, (Medco and Express Scripts merged in 2012) total prescription drug expenditures have skyrocketed 1,100 percent and per capita expenditures have increased 756 percent,” he said in an email. His organization has not yet received a reply from the Trump team.
On the alleged lack of transparency and accountability, Norton cited as an example rebates from drug manufacturers that PBMs are able to negotiate.
“It is unknown how much of that gets passed on and to what end,” Norton said. “Additionally, PBMs often engage in 'spread pricing,' or charging a health plan potentially much more than the PBM pays the pharmacy for filling a prescription without sufficient transparency."
But Mark Merritt, president and CEO of the Pharmaceutical Care Management Association (PCMA), which represents PBMs, said community pharmacists have been saying the same thing for 15 years and want to go back to an era where they can charge whatever price they want.
“Employers, unions and others do not want to overpay,” Merritt told Patient Daily. “Nobody has to hire a PBM but the reason most sophisticated companies do so, and Medicare, is that it reduces over all drug costs by 30 percent. It creates an efficient pharmacy network.”
Merritt conceded there is a healthy tension between pharmacists and pharmacy benefit managers, which is “probably a good thing.”
In their letter to the Trump administration, the community pharmacists called on it to “scrutinize PBM corporations and demand much greater transparency from these entities.”
“We believe there are simpler, more transparent and more economical ways to administer the important prescription benefit Americans need to get and stay healthy," the letter said. “Advancements in transaction and information technology now allows for straightforward prescription transactions that allow the marketplace to work to keep costs in check.”
PBMs have a different thinking on what the new administration should do. They want the Food and Drug Administration to receive more resources so that new drugs can more quickly be brought to market. While the 21st Century Cures Act, signed into law late last year, delivers some additional resources, it is not enough, said Merritt. His organization has launched a campaign, Drug Benefit Solutions, outlining how PBMs help to reduce costs, breaking down the drug supply change and outlining what more can be done to bring prices down.
“The best way to bring down prices is to have competing drugs.... getting competing drugs to the market faster,” Merritt said. “The Cures Act is good but there is more to be done, including a fundamental look at what the FDA’s mission is.”
It is, he said, one thing to definitively say a drug is not safe, but quite another to not have the resources to decide one way or another. A hard look at Medicaid, and the sale and delivery of drugs through that program, by improving and modernizing how states spend their dollars, could also lead to significant savings, PBMs believe.
The PCMA believes the Trump administration will want to tackle prescription drug prices.
“What (Trump) is really saying is that he does not want to waste spending. That is in our wheelhouse,” Merritt said.