Dear Colleague,
When a company raking in $320 billion a year becomes so desperate it issues a "white paper" to smear small businesses and the association that represents them, it shows they must really be feeling the heat. That's what CVS Health (really "Aetna-Caremark" but shhhh, they don't want anyone to know their true identity!) did this last week. The piece is entitled, Independent Pharmacies: Myths versus Reality. They posted it on their website right after a blizzard of harsh stories from the New York Times and the Wall Street Journal, and a blistering FTC report on their anti-competitive behavior, and just ahead of this week's bipartisan beat-down by the House Oversight Committee. In other words, it's damage control.
One clue that the "white paper" lacks academic rigor is that it relies on "evidence" like this to prove that NCPA is exaggerating when it talks about PBMs:
See? Our vampire cartoon is totally misleading (it was a promotion for our LDF and you can donate here). PBMs aren't really vampires (or leeches), and they don't suck blood. They're big, cuddly, friendly corporations who are looking out for consumers and patients. Sorry but when you are the self-appointed judge, jury, and executioner deciding who gets what prescription drugs for how much, you need to grow thicker skin.
"Independent pharmacies understandably dislike PBMs, who work to protect plan sponsors, including American employers and unions, from efforts by independent pharmacies to charge even higher prices to consumers," says the "white paper." It goes on for 39 pages, citing NCPA press releases, NCPA congressional testimony, my quotes, and quotes from NCPA staff.
I guess their "researchers" forgot that independent pharmacies don't set prices. PBMs decide how much consumers pay. And, as the FTC and the House Oversight Committee found, PBMs frequently manipulate prescription costs to drive patients into their own chain stores or mail-order pharmacies.
The "white paper" devotes a lot of space to graphs and data showing that independent pharmacies have maintained a steady market share for a long time. That's misleading on two counts. First, maintaining market share in a shrinking market doesn't mean stores aren't closing because of PBMs. It means that just as many different types of pharmacies are closing because of PBMs. Then there's what I call the spreadsheet fallacy: if the overall number of stores remains constant, then stores aren't closing. What? If 10 stores close because of PBMs, and 10 other stores open despite PBMs, we still lost 10 stores because of PBMs. And those stores were run by real families, and relied upon by real patients who don't show up on a spreadsheet. It's spin-doctoring, and it's completely dishonest. In fact, we know based on industry data that independent pharmacies are closing at a rate of about 1.5 per day since last year. And that data fails completely to capture the pain and panic that I hear directly from members every day who are on the verge of losing everything and shutting their doors.
Fortunately, as I mentioned earlier, Congress and the FTC aren't falling for this nonsense. This week, Oversight Committee Chairman James Comer (R-Ky.), and Ranking Member Jamie Raskin (D-Md.), who agree on virtually nothing else, tag-teamed the PBM honchos on spread pricing, patient steering, and formulary manipulation. Comer noted that PBMs are failing miserably at their main purpose, which is to lower drug costs. "Instead, drug prices have gone up every year for the past 15 years, and patients have had worse health outcomes," he said.
That went on for 5 hours, with nearly every member of the committee from both sides of the aisle expressing shock and outrage at what they found. In fact, five members of Congress who aren't on the committee, including Rep. Buddy Carter (R-Ga.), requested permission to participate in the hearing so they can get their licks in too.
For their part, the PBM CEOs stuck to their threadbare talking points about how they're saving money for patients and taxpayers. But it was clear that no one in the room was convinced. Several asked the PBMs how can it be that they are right, and the FTC, New York Times, Wall Street Journal, and thousands of independent pharmacies are wrong? We captured that same sentiment in an ad that ran in D.C. area editions of the Wall Street Journal the day of the hearing. Bipartisan PBM reform is close. Congress just needs to finish its job.
I know you've heard of our Finish the Fight campaign, which features national and targeted TV commercials, lots of digital media, and a big grassroots push. If you're not involved yet, it's time to get off the couch. We've already gotten 15,000 patients to send letters to Congress and we plan on getting many more. You can help by downloading the resources from the website, including the TV spots, and using them in your stores, with your patients, and on your social media platforms. In the meantime, thanks for your support, and I hope you're having a much better summer than the PBMs!
Best,
B. Douglas Hoey, Pharmacist, MBA
NCPA CEO
