NCPA's Blog - The Dose

The Dose

Experts Examine the PBM Industry and its Impact on Prescription Drug Prices - Part One

by John Norton | Feb 28, 2018

Since 1987, total spending on prescription drugs in the U.S. has increased 1,010 percent, while overall price inflation only grew 125.9 percent. Over that same time period, the profits of pharmacy benefit managers, entities that are supposed to generate costs savings, have grown rapidly. The three largest PBMs control almost 80 percent of the market and determine what medicines patients can use, the cost patients pay for those drugs, and where patients can fill their prescriptions.

The National Community Pharmacists Association and the Center for Medicine in the Public Interest both believe the status quo is unsustainable. Last fall, NCPA and CMPI partnered for an event called "Principles for Patient-Centered Prescription Drug Coverage" at the National Press Club. They brought together experts and organizations to discuss the role pharmacy benefit managers play in rising prescription drug costs. The goal was to identify the principles and opportunities for collaboration to ensure patients have access to medicines that work best for them at the lowest cost, without unnecessary obstacles.

At the event, CMPI President Peter J. Pitts, who has written prolifically on prescription drug issues, moderated the first panel (the highlighted video is about 34 minutes long) titled "How PBMs Affect Access and Affordability." The panelists included NCPA CEO B. Douglas Hoey, Pharmacist, MBA; Community Oncology Alliance Director of Communications Nick Ferreyros, and Derek Daggett, Senior Vice President of SmithRx (a transparent PBM). They discussed how PBMs use rebates, formulary placement, drug-switching, narrow/restricted pharmacy networks, and their own proprietary mail order/specialty pharmacies to limit patient choice and access to medications based on unverifiable claims about savings.

The panelists also discussed how PBMs impose direct and indirect remuneration fees after adjudication, limit transparency with generic prescription drug reimbursements and use manufacturer drug rebates to increase revenue at the expense of patients, health plan sponsors and pharmacies.

It's worth a watch.