Dear Colleague,
At the start of the week, I thought I would be writing about the latest from NCPA's Finish the Fight campaign "PBM Career Day."
It's one of the best 60-second overviews of the impact of PBMs on patients and prescription drugs (BTW, the best 120-second overview is still by Dr. Glaucomflecken).
The release of the video was exciting but even it took a backseat to the release (finally!) of the Federal Trade Commission's preliminary report on PBMs. The title says it all: "Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies."
It's been just over two years since the FTC voted unanimously to move forward with a 6(b) study to dive deeper into the PBMs. Up to that point, the PBMs and the FTC had been blowing the cobwebs off a 2005 FTC study that essentially said 'PBMs are great—nothing to see here.' Much of the preliminary report's findings won't be surprising to pharmacy owners who, unfortunately, have had a front row seat to the havoc PBMs have caused to competition and consumer welfare. However, here are three of the things I found somewhat surprising from the report:
PBMs can ignore the FTC—I'd heard that the PBMs were not being, shall we say, "cooperative" with the FTC's work. That's not really surprising because for many years, PBMs have postured themselves as overruling the authority of state boards of pharmacy and medicine. They blatantly disregard state laws. Still, not complying with a federal agency for TWO years takes their 'We're above the law' hubris to a new level. It's almost like they don't connect that their biggest customer is the federal government (Tricare, Medicare, Federal Employees, etc., etc.). If PBMs are enhancing competition and good for consumers, why hide the data?
Rampant steering in commercial plans—I knew PBM steering to their affiliated pharmacies was insane, but the actual stats are jaw-dropping. Commercial plans accounted for 69 percent of dispensing revenue at PBM-affiliated pharmacies but only 28 percent of prescription revenue in Medicare Part D, which has protections for seniors against PBMs forcing them into their mail-order warehouses. That discrepancy is bad enough but the ala mode on this anti-competitive cow pie is the use of atrocious Medicare Part D prescription payment rates. Rather than steer patients to their affiliated pharmacies via contracts with the payers, as they are doing in commercial plans, PBMs are steering seniors into their affiliated pharmacies through take-it-or-leave-it contracts with the pharmacies—Cigna-ESI being the worst offender, according to NCPA members.
The PBMs' self-defense—In a three-week period when:
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The New York Times prints an exposé it had researched for a year on PBMs driving up the costs of prescriptions;
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The Wall Street Journal runs a story on PBMs bilking Washington state through mail-order steering; and
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A 71-page FTC preliminary report (with 334 citations!!) is released corroborating the findings of the NYT research and the WSJ story ...
I expected something better than griping that the FTC is biased and the report lacked facts (also the exact words they used about the NYT story). 334 citations seem like a whole lot of facts to me. Notably, they offered up no defense about dispensing revenue from pharmacies affiliated with the big 3 PBMs exceeding NADAC by $1.6 billion for just two drugs (imatinib and abiraterone) or contesting that just 6 PBMs manage 94 percent of the prescription drug claims in the U.S.
Oh ... and they also apparently engaged former Kansas Congressman and U.S. Secretary of State Mike Pompeo. At least that's the only reason I can figure for Pompeo to opine on PBMs. Then again, maybe Pompeo was poring over the NYT (which I'm sure he reads cover to cover every day) and was moved to action to defend the PBMs that I'm oh-so-sure his former constituents back in south-central Kansas loved.
His editorial was disguised as a political thing but it smacks of selling out. If you share a different view than his, send your comments to Fox News.
It was a big week. NCPA also co-hosted a Capitol Hill briefing on how PBMs impact employers, patients, and underserved committees. The Energy and Commerce Committee had a hearing on the FTC's budget and Rep. Buddy Carter (R-Ga.) asked some probing questions to the commissioners about the preliminary report. Reports leaked that the FTC is preparing to sue the PBMs over their business practices that made insulin sky-high and deadly unobtainable for some patients. Lots of progress this week. Now, we need Congress to take the hint and Finish the Fight.
Best,
B. Douglas Hoey, Pharmacist, MBA
NCPA CEO
