News Releases - 2017

NCPA Makes the Case for PBM Reform at FTC Workshop

by NCPA | Nov 08, 2017

ALEXANDRIA, Va. (Nov. 8, 2017) — During a Federal Trade Commission workshop today, the National Community Pharmacists Association outlined some troublesome business practices associated with pharmacy benefit managers. The workshop, "Understanding Competition in Prescription Drug Markets: Entry and Supply Chain Dynamics," featured industry experts and stakeholders.

NCPA's comments were made during a panel discussion about pharmacy benefit managers. The day-long workshop consisted of several panels—each dedicated to highlighting various supply chain entities and the role that each may play in increasing the cost of prescription drugs.

"I commend the FTC for bringing health care industry officials together to discuss the pharmaceutical supply chain's strengths and weaknesses. It's timely as the government ponders the best course of action going forward," said NCPA CEO B. Douglas Hoey, Pharmacist, MBA. "Independent community pharmacists have for years been sounding the alarm about the virtually unregulated PBM industry. Until that business model is fixed, the system for dispensing prescription drugs is going to be fundamentally flawed and costs will likely continue to rise."

Hoey added, "Whether it is the private or public sector, there needs to be a greater emphasis on ensuring the prescription drug supply chain maximizes efficiencies and rewards successful strategies for achieving better health outcomes."

NCPA pointed to several challenges with the current system, including:

  • The lack of PBM transparency hinders plan sponsors and patients from making the most cost-effective choices with respect to prescription drug benefits.

  • The PBM marketplace is overly concentrated, which increases the leverage of the three largest drug middlemen over everyone else.

  • PBMs have an inherent conflict of interest in that they own pharmacies that compete with the pharmacies with which they contract for services and create plan designs that incentivize or force patients to use their proprietary pharmacies.

Looking ahead, NCPA highlighted some of the alternate models that employers and policymakers are now considering, including:

  • Passing legislation that creates greater PBM transparency.

  • Realigning the incentives so that the playing field is level for all stakeholders and costs are not unnecessarily being added to the system.

  • Implementing outcome-based payments that employ metrics to determine the quality of services being rendered.

  • Minimizing the role of PBMs by allowing health insurers and plan sponsors to contract directly with pharmacies.

  • Improving alignment between prescription drug and overall medical spending to increase medication adherence that can help avoid costly medical interventions.

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The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 22,000 independent community pharmacies. Together they represent an $80 billion health care marketplace and employ more than 250,000 individuals on a full- or part-time basis. To learn more, go to www.ncpanet.org, visit facebook.com/commpharmacy, or follow NCPA on Twitter @Commpharmacy.