Pharmacy Benefit Managers Backlash: 6 Industry Quotes

Congress, purchasers, and industry analysts weighed in on the role pharmacy benefit managers play in prescription drug costs.

In the final days of May, the pharmacy benefit manager (PBM) market was in the wrong kind of spotlight. A new federal bill and calls for Federal Trade Commission (FTC) action revealed the story that's been hiding in plain sight: that an increasingly small number of PBMs control the market and are themselves controlled by large insurers.

The following quotes relate to new Congressional action taken, responses to that action, and one pharmaceutical industry analyst who notes how alternative strategies often remain hamstrung.

1. "It is critical for Congress to direct the Federal Trade Commission to go after these arbitrary, unfair and deceptive practices while also establishing more transparency and accountability." — Sen. Chuck Grassley (R-Iowa)
    
2. "PBMs are the middlemen in the prescription drug supply chain and it's time for Congress to give the FTC the ability to shine a brighter light" — Sen. Maria Cantwell (D-Wash.)
    

Employers are among the groups impacted by PBM practices. On the same day the bipartisan Grassley-Cantwell bill was announced, EmployersRx—or Employers' Prescription for Affordable Drugs—a coalition of the largest employers in the U.S. sent a letter to the FTC urging action.

3. "Today, many PBM contracts with employer purchasers prohibit the disclosure of data regarding gross and net prices, rebates, and other financial information." — EmployersRx
    

The EmployersRx letter — penned by leading member organizations such as the Purchaser Business Group on Health (PBGH) — adds that "PBM contracts also contain unnecessarily complex definitions of commonly used terms, including 'generic' and 'specialty' drugs, that are often different from how those terms are used in regulation."

In an exclusive quote to HealthLeaders, PBGH's Executive Director for Health Policy Bill Kramer added his group's insight on how vertical PBM market integration has led to "inside dealing."

4. "These companies also own their own drug wholesalers, specialty pharmacies, mail-order pharmacies, group purchasing organizations, co-pay accumulators, and—in some cases—physician practices … The FTC has a responsibility to follow the money from initial sale of drugs from drug makers to wholesalers all the way to the final sale of drugs to consumers." — Kramer
    

Other stakeholders request that multiple avenues beyond the FTC be taken to strengthen PBM oversight.

5. "There are plenty of PBM actions for policymakers and regulators to address in order to ease the havoc they have wreaked on patients and small business independent pharmacies." — B. Douglas Hoey, CEO, National Community Pharmacists Association
    

Hoey adds that controlling PBMs allows insurers to "set their competitors' prices, dictate their competitors' reimbursements, use competitors' data to steer patients to PBM-affiliated retail, specialty and mail-order pharmacies, and limit where and what consumers can buy."

Among the chorus is one industry analyst's call to action for other stakeholders.

6. "Large employers, health plans, and government payers have shown limited appetite for change and continue to rely on the largest companies for PBM services." — Adam J. Fein, CEO, Drug Channels Institute.
    

While noting that "smaller employers have grown more willing to embrace small players by carving out PBM services from their health plan," Fein concedes the abiding challenge that smaller PBMs are often still dependent on the larger managers to perform the full cycle of business operations.