NCPA Executive Update

NCPA Executive Update delivers insights on legislative, regulatory, policy, and industry developments from NCPA CEO B. Douglas Hoey, Pharmacist, MBA, to NCPA members and pharmacy leaders every Friday.

Some Members of Congress Want to Return PBMs' Big Black Box | NCPA Executive Update | December 15, 2017

by NCPA | Dec 15, 2017

Dear Colleague,

Doug Hoey

As we get closer to the holidays, there are a lot of boxes being wrapped as colorful gifts, but at a Congressional hearing on Wednesday, Rep. Morgan Griffith (R-Va.) talked about another kind of box, a "big black box called PBMs."

Rep. Griffith is a member of the House Energy and Commerce Health Subcommittee, which held the hearing called "Examining the Drug Supply Chain" to educate members of Congress about how prescriptions get to consumers and why they cost what they do.

It was a massive panel of witnesses — 10, to be precise — that was arranged in supply chain order representing the steps from creation (pharmaceutical manufacturers) to the end user (patients/consumers).

Here's the list of organizations invited to the hearing and the sequence in which we were seated:

  1. PhRMA
  2. BIO
  3. Association for Accessible Medicines
  4. Healthcare Distribution Alliance
  5. PCMA
  6. America's Health Insurance Plans
  7. American Hospital Association
  8. American Medical Association
  9. NCPA
  10. Patients for Affordable Drugs

I thought this sequencing offered some interesting symbolism. Notice who is closest to the patients? That's right. We are — community pharmacists. We are the most accessible health care provider for patients, and we are the last health care provider to see the patient before they take that first or next dose of the medication that's helping them live a better life.

And notice who is squarely in the middle — literally, the middleman.

Each witness gave opening remarks — mine start at the 53:21 mark at this link. All remarks were limited to three minutes because of the massive panel size.

Here's a snippet:

"Over the past few years, CMS has been testing new payment and care models across hundreds of community pharmacies. Early findings suggest high patient satisfaction, improved outcomes, and reduced overall health care spending, with reductions of greater than $1,000 per year for those patients who received high-level clinical intervention. To achieve that future promise, however, systemic barriers must be overcome. We believe intermediary parties — pharmacy benefit manager "middlemen" — are increasing pricing complexity and contributing to higher prescription drug costs."

In addition to Rep. Griffith, several members were highly complimentary of independent community pharmacists. Reps. Larry Buchson (R-Ind.), John Sarbanes (D-Md.), John Shimkus (R-Ill.), Diana DeGette (D-Colo.), and Anna Eshoo (D-Calif.) all offered nice comments about the value of their community pharmacists. Rep. Buddy Carter (R-Ga.), the only pharmacist in Congress, was fiery in his questioning of the PBMs and pressed hard when dissatisfied with the responses he was getting.

Three minutes is not a lot of time to go into detail on all of the concerns we have with PBM practices, so we focused on pharmacy DIR fees:

"I will expand on my members' current No. 1 concern, DIR fees. These fees are assessed on pharmacies months after a prescription is filled. CMS has identified concerns from the rapid growth in pharmacy DIR fees, including higher beneficiary costs, accelerating patients into the "donut hole," and the shifting of liability for Part D costs from plan sponsors to CMS."

In addition to my verbal comments and the hearing discussion, NCPA submitted a nine-page written statement for the record expressing our concerns in more detail.

Last Call: Please Complete the Member Priority Survey
It was with confidence that I could say that pharmacy DIR fees are your No. 1 concern because that's where it was ranked on NCPA's 2016 Member Priority Survey and, of course, from guidance by NCPA board members, who suffer from pharmacy DIRs the same as the membership. The deadline for this year's Member Priority Survey has been extended for one week, to Friday, Dec. 22. We want to hear from you. Please take three or four minutes to fill out the survey.

The hearing lasted 3.5 hours, and the news reports say there was a lot of finger pointing, which was true. There was also a lot of head shaking from committee members as they looked down at the 10 witnesses and the byzantine prescription drug pricing system we represent. It doesn't need to be so difficult, but it does need to be transparent, and that can't happen as long as there is a big black box right in the middle obscuring everyone's vision.

Best,
Doug Hoey