BOSTON — Pharmacy Benefit Managers (PBMs) — hidden middlemen who work for insurers — are coming under increased scrutiny at both the federal and state levels for the role they play in healthcare costs. This is good and it is necessary because there are several practices PBMs have implemented that end up hurting the patient financially and potentially medically, and ultimately increasing healthcare costs.
PBMs have traditionally negotiated discounts off drug prices with manufacturers in the form of rebates. They also tell the pharmacist what to charge and what they will pay the pharmacy to dispense the medication, which includes a fee for advising the consumer.
There are several problems with the current model. Only the PBM knows the rebate amount it received from the manufacturer. Once the PBM passes some of the rebates to the insurer and pays the pharmacy, it pockets the rest. Consumers may or may not ever see a benefit from the rebates.
SEEKS NEAL’S SUPPORT
There’s an effort at the federal level to do away with those rebates, an issue both Democrats and Republicans should agree on to help patients. Following a proposed rule to eliminate rebates within Medicare Part D, there is proposed legislation targeting private market insurers that would ensure all rebate savings are passed to all of us when we pick up our prescriptions at the pharmacy.
It’s my sincere hope that Congressman Richard Neal and the rest of the Massachusetts delegation support this measure.
Another problem with the way things stand right now is that PBMs are threatening community pharmacies and the services their patrons expect.
When you go to the pharmacy to pick up your medications, you assume if there’s a potential issue that your pharmacist will counsel you about it. But that’s happening less and less.
Unfortunately, PBMs, which maintain pharmacy networks and decide what pharmacy services to pay for, have made a conscious decision to reduce their payments for these services to the point that they barely cover the cost of the medication let alone counseling services. In many cases PBMs are paying the pharmacy less than the cost of the medication. As payments are lowered, community pharmacies increase prescription volume, incorporate automation, and decrease services in attempt to reduce their costs. This has reduced many pharmacies to doling out medication like merchandise. It’s one more, in a long list of things PBMs are doing, that hurt consumers.
When patients don’t receive counseling by the pharmacist on how to take their medications or what to expect, the results aren’t good. Research shows, that when medications are not taken as prescribed, it can lead to decreased effectiveness, increased costs and poor outcomes. The research also shows that community pharmacists can significantly increase adherence rates. The cost of this service is small compared to the cost of additional medications and uncontrolled conditions leading to more doctor office visits and ERs.
LEADS TO CONSOLIDATION
An additional result of PBMs reducing their payments has also been a consolidation of both chain and independent community pharmacies. Picking up a prescription at a nearby pharmacy may get more difficult, especially if you don’t want to go to a pharmacy owned by a big PBM. Ohio has proof that CVS Caremark is paying CVS retail pharmacies more for the same medications than it pays other pharmacies.
In a recent commentary I made recommendations that will reduce the excessive costs currently being paid to pharmacy benefit managers. But there’s more we can do by maximizing the effectiveness of prescribed medications.
Since their inception, PBMs have sought to increase their profits and decrease the ability to fully understand what we are paying for and how much they are making. The current system perpetuates that and results in excessive costs, fewer services, and consumers left in the dark — and potentially in danger — about their medicines.
Todd Brown is the vice chair of the department of pharmacy and health systems sciences at Northeastern University and the executive director of the Massachusetts Independent Pharmacists Association.