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Analysis

PBMs Launch Counteroffensive as Trump Administration Floats Plan to Eliminate 'Middleman' Drug Rebates

By John Commins  
   February 06, 2019

OnYourRxSide campaign targets critics who say safe harbors allow PBMs to flourish as self-serving middleman leveraging an arcane regulatory framework to rake in billions in profits at the expense of consumer.

Pharmacy benefits managers are hitting back against the Trump Administration's call for the elimination of the "middleman" rebates they receive from drug makers.

The Pharmaceutical Care Management Association this week launched a public relations campaigned dubbed OnYourRxSide, which PCMA says "is designed to increase awareness of the value that pharmacy benefit managers bring to patients and the employers and public programs providing prescription drug coverage."

"PBMs have an established and successful track record of implementing consumer-friendly, market-based tools, such as negotiating with drug manufacturers, to reduce costs for consumers," PCMA President and CEO JC Scott said in a media release.

"This campaign is designed to break through the noise in the drug pricing debate and clearly demonstrate how PBMs are the advocates for consumers in the fight to lower prescription drug costs," Scott said.

OnYourRxSide targets the claims of critics who say the safe harbors allow PBMs to flourish as self-serving middleman who leverage an arcane and opaque regulatory system to rake in billions in profits at the expense of consumer.

Instead, the PBMs say their "core mission is to be the primary advocate for consumers and health plans in the fight to keep prescription drugs accessible and affordable."

"PBMs negotiate on behalf of consumers, and are able to keep a lid on overall costs for prescription drugs with market-based tools that encourage competition among drug makers and drugstores, and incentivize consumers to take the most cost-effective and clinically appropriate medication," OnYourRxSide said.

The counteroffensive comes and more pressure is being place on the federal government to address spiraling drug costs. The issue has gained a lot of attention in the past year, was a key issue in the 2018 mid-term elections, and is expected to be a key issue in the 2020 presidential elections.

Reducing the prices consumers pay for prescription drugs is also seen as one of the few issues that a sharply divided and partisan Congress can forge a compromise.

Rebates drug makers pay to PBMs are legal under the safe-harbor provisions of the Anti-Kickback Statute.

The Trump Administration's proposal would eliminate the safe harbor for prescription drug rebates paid by manufacturers to PBMs, Medicare Part D plans, and Medicaid managed care organizations. It would implement a fixed-fee model between PBMs and manufacturers and add a safe harbor for discounts offered directly to consumers.

Health and Human Services Secretary Alex Azar says the proposal would pass savings along to patients by increasing transparency, encouraging discounts given directly to consumers rather than middlemen, and prohibiting a compensation system that incentivizes annual price hikes.

"This proposal has the potential to be the most significant change in how Americans' drugs are priced at the pharmacy counter, ever, and finally ease the burden of the sticker shock that millions of Americans experience every month for the drugs they need," Azar said in a statement.

President Donald Trump referenced addressing high drug costs as "the next major priority for me, and for all of us" in his State of the Union address Tuesday night, but he provided few details beyond his ongoing calls to require disclosure of the real prices of pharmaceuticals, which he said would foster competition among stakeholders.

"It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place. This is wrong, unfair, and together we can stop it," Trump said, earning applause from both sides of the aisle.    

“This campaign is designed to break through the noise in the drug pricing debate.”

John Commins is a senior editor at HealthLeaders.


KEY TAKEAWAYS

The Pharmaceutical Care Management Association launches a public relations campaign to address criticism of the PBM business model.

PBMS say their 'core mission' is to be the primary advocate for consumers and health plans in the fight to keep prescription drugs affordable.

This counteroffensive comes as the Trump Administration and Democrats and Republicans in Congress vow to address soaring drug prices for consumers.


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