Pharmacy Benefit Management (PBM) Reform Is the Best Way to Ensure Patient Affordability

As our country becomes increasingly fragmented, it can be difficult to find common ground. One of the few issues that has received wide support across the political spectrum is the need to reduce the costs that patients pay for their prescriptions.

In recent years, a consensus has formed in Washington, D.C. about the need for Congress to shed light on the powerful but largely unknown supply chain action in the healthcare sector that is responsible for drug spending for patients: pharmacy benefits managers or PBM.

As the momentum for greater PBM transparency and accountability builds, it’s time for Congress to take action on PBM’s monopolistic practices to help lower drug prices and bring much-needed clarity to the drug, healthcare, and patient care system.

If you are not familiar with PBM, you are not alone. The simplest term to describe them is intermediaries, and that’s the summary: Private health plans, as well as public insurance programs like Medicaid and Medicare Part D, contract PBMs to manage prescription benefits.

PBMs control virtually every aspect of the prescription drug supply chain: developing and managing access to the pharmacy network, determining pharmacy drug reimbursement, negotiating reimbursement with drug manufacturers, and developing drug “formulas” for health insurance plans. A formulary is a list of prescription drugs that are covered by the plan, as well as information about a patient’s coverage status, such as whether they are fully covered or require a copay or deductible.

It would be an understatement to say that they have a huge impact on what drugs patients have access to and what they have to pay for. And it is this influence, and the role it plays in determining the cost of medicines, that requires further monitoring.

Erin Trish, Ph.D. in health policy and economics, co-director of the Leonard D. Schaeffer Center at the University of Southern California, recently testified before Congress about how the PBM mission has been transformed over the years to the detriment of patients.

Dr. Trish stated, “Historically, PBMs have been independent of health insurance plans and have added value by lowering prices, encouraging generic introduction, and expanding mail-order services. However, the wave of consolidation in recent years, including the purchase of PBM by health insurers and their expansion into pharmaceutical markets, and other activities have led to a distortion of behavior. Unfortunately, evidence suggests that PBMs are using their position to profit at the expense of patients, payers and the pharmaceutical innovation system as a whole.”

As more information becomes available, it appears that profit making and the growth of non-transparent commercial schemes have become the focus of PBM rather than patient savings.

As author and health advocate Wendell Potter noted in a February 2023 blog post: “Three companies—UnitedHealth Group, CVS/Aetna, and Cigna—reported that their PBM business units, which control 80% of the prescription drug benefit market in The United States has contributed. a staggering $492.3 billion to her 2022 total revenue. Another way to look at it is that, collectively, these companies now generate 60% of their revenue from their PBM divisions.”

While the numbers are staggering, they are not breaking news. Congress has known for years that PBMs are a problem. In June 2019, the Congressional Hispanic Caucus (CHC) sent a letter to PBM — CVS Health, UnitedHealth Group and Express Scripts Holding Company — asking them to discuss the role of PBM in determining the cost of insulin.

Now we need CHC to lead a comprehensive PBM reform. We’ve already seen CHC chair incumbent Congresswoman Nanette Barragan back legislation to allow co-payments for patients, stating, “Health insurance plans and PBMs should not force families to choose between their medications and their costs.”

I couldn’t have said it better; I hope Congresswoman Barragan and her CHC colleagues will encourage PBM to put patients first and help disadvantaged communities in Los Angeles County better pay for prescription drugs.

Because Hispanics are more likely to live with a variety of chronic conditions that require prescription drug treatment, including diabetes, liver disease, high blood pressure, and more, PBM reform could make treatment more accessible and affordable for Hispanic patients to maintain and improve. their health.