As practicing physicians and medical professionals, we stand at the front lines of patient care, witnessing firsthand the effect of prescription drug prices on the health and well-being of our patients. It is disheartening to see a system that is supposed to prioritize patients often working against their interests, thanks in no small part to pharmacy benefit managers (PBMs). The time has come to fix the problems created by PBMs, who are exerting pressure on drug prices and harming patients in the process.
A glaring example of this dysfunction is the way PBMs construct prescription drug formularies. Last year, a shocking revelation emerged: a $10,000 brand-name drug for prostate cancer was preferred on a formulary, while its $450 generic counterpart was either not covered at all or relegated to the specialty tier. How can such a stark disparity exist? The answer lies in the intricate web of contracts between PBMs and drug companies.
The underlying premise of this system is shockingly simple. Drug companies pay PBMs for favorable formulary placement, with the payment typically tied to the list price of the drug. This creates a perverse incentive for PBMs to favor drugs with higher list prices because it increases their income potential. Research from the University of Southern California has shown that, on average, a $1 increase in rebates paid by drug companies to PBMs results in a $1.17 increase in the list price of the drug. In essence, the entities tasked with lowering drug prices can actually profit more when drug prices are higher. This is a glaring market distortion that cannot be ignored.
The position of a drug on a formulary is not merely a bureaucratic decision; it directly affects a patient’s ability to access vital medications. When a drug is placed on the specialty tier, patients often face significant access barriers, including burdensome management protocols. Thus, patients are ensnared in a pricing paradox: the payments from drug companies to PBMs may lead to cheaper options being relegated to an inaccessible formulary tier, while those very payments also contribute to higher list prices, against which patient co-insurances are calculated.
Patients are left grappling with reduced access and higher out-of-pocket prescription costs, a lose-lose scenario.
Fortunately, members of Congress from both sides of the aisle have recognized the urgent need for reform. Senators Bob Menendez, D-New Jersey, and Marsha Blackburn, R-Tennessee, have introduced legislation aimed at severing the link between PBM compensation and drug pricing in Medicare Part D. Their proposal, which advanced out of the Senate Finance Committee this summer, would require PBMs participating in Part D to accept flat fee compensation, thus eliminating the perverse incentive to favor higher-priced drugs.
On the House side, Rep. Buddy Carter, R-Georgia, a pharmacist with 30 years of experience, has been a tireless advocate for reining in the PBM industry. His knowledge of the challenges faced by independent pharmacies and patients gives weight to his pursuit of reform. Rep. Lisa Blunt Rochester, D-Delaware, has joined forces with Carter to introduce legislation that, among other crucial reforms, delinks the list price of drugs from PBM compensation in Medicare Part D. The Protecting Patients Against PBM Abuses Act would remove the perverse incentives that encourage PBMs to drive up drug prices.
The fact that lawmakers with diverse political views are united in pushing for targeted reform underscores the urgency of the situation. As medical professionals who witness the effect of soaring drug prices on our patients, we wholeheartedly support efforts to delink drug prices from PBM compensation. Correcting this fundamental market distortion is a crucial step toward a healthcare system where formularies are designed with the best interests of patients in mind, not for the profit of PBMs and drug companies.
It’s time for a prescription for reform that puts patients first. We urge all Americans to join us in advocating for the passage of the Protecting Patients Against PBM Abuses Act and the broader reform needed to ensure affordable access to essential medications for all.
Robert Levin is the president of the Alliance for Transparent and Affordable Prescriptions.
Angus Worthing is the vice president of ATAP Action Network.
Reprinted with Permission from DC Journal – By Robert Levin & Angus Worthing
One of the medications prescribed by my doctor came with a price tag of almost $100 using my Part D. Using a discount prescription card and not going thru insurance, that same medication cost me $12. That make NO sense to me.
I personally don’t trust prescription drugs! Why? Because when I watch the drug commercials on TV the side effects sound scarier than what health issues they effect. I try to always find a natural alternative. For example, I was getting pain caused by kidney stones! The pain immediately subsidied after drinking a diluted apple cider vinegar with water. The apple cider vinegar helps to dissolve the stones but should be diluted to not damage tooth enamel or throat problems. You could always use it as a dressing on salad. The apple cider vinegar could also help in shrinking as enlarged prostate which is a problem for most senior men.
In my opinion, everything that is run by our government is full of waste and corruption. It is shameful that drug companies purposely push their latest, most expensive drugs onto companies who provide healthcare for medicare patients. If everyone had altruistic intentions instead of thinking of only how much money they can rake in, we would be in a much better place. It seems we have a lot of parasites out there sucking the blood out of our most vulnerable people.
I will be turning 65 at the end of the year and I don’t want Medicare. I will take care of my own health and I will try to use only the things that God put on this earth. (It’s in the Bible) We forget that our bodies have the ability to heal themselves. We are taught to live in fear and we can’t help ourselves without consenting a doctor first. Prescription drugs are killing more people in this country than disease. Research what the Rockefellers did to our Medical Schools back in the early 1900s through the Flexner Report. Rockefeller knew he knew he could produce pharmaceuticals with petroleum – so he bribed and blackmailed every Medical College and changed all the curriculum. The medical model now is “keep ’em sick and keep ’em coming back! It’s a revenue stream. No one is getting cured anymore of anything. Pharmaceuticals, Radiation and Surgery!!!
Everything is now a lifelong issue and chronic.
I am more concerned that the drugs are priced to get maximum profit for the company more than necessary which comes down to us in rising out-of-pocket costs. There’s absolutely no reason for a product that costs pennies to produce should cost the consumers 3000% over in price. Plus all potential side effects should be clearly explained by both the prescribing doctor and the pharmacy distributing the medication.
I started taking a blood cancer med in 2015. It was billed at $10K+/mo. Tricare changed pharmacies and a couple things happened. The dosage changed (that wasn’t a problem) and the quantity of the tablets changed: from 30 to 28. The cost billed has gone to $18K+/mo. Notice that a 28 day prescription adds a 13th month to the “Specialty Pharmacy’s” coffer. Fortunately, Tri Care and Medicare cover all but a very minimal co-pay. It doesn’t stress me financially, but it sure does ethically.
Appalling. I wondered why my Medicare Part D insurance is practically useless, and this explains it all. I can get my Drugs Cheaper using Good. Rx app. than using my Part D insurance. This bill however needs to go a step further and also address why a person with Private Medical Insurance can apply to a. Drug Company to get a card for a free or reduced copay Brand Named Drug but it wont give the card to Medicare recipients.
Separating healthcare into separate parts with alphabet distinguishers was phony from the start.. Care for any injury or illness is whatever the attending physician knows can/might heal. Insurance is not a cure it is one way of paying. The picture is obscured by the current complications of insurance. More and more federal meddling in healthcare will cost more and more.
The prostate medication they’re talking about is probably orgovyx. It’s cost is $2,700 per month. Even with my anthem Medicare Plan I’d have had to put out 800 bucks a month. Luckily, I qualified for Pfizer’s financial assistance program and it is not costing me a cent. Nor has it cost Anthem a cent.
That is not to say the author doesn’t have a good point.
We just have to accept health care is a for profit business.
Sure hope this change comes to pass. Doubt it will with the money pouring in from lobbyists. That should be the main course of action from an honest Congress but will never happen.
My mom’s Medicare wanted me to drop my local pharmacy for Canadian chain CVS so I’ve been paying on my own and I have not really noticed a price change. So much for Obamacare…
I believe this opinion piece way over simplifies the situation and doesn’t reflect all PBMs.