Threatened by regulation and new business models, PBMs should show their ability to improve patient outcomes

by John Vinson (john@arrx.org) 409 views 

A recent opinion piece submitted to Talk Business and Politics by Dr. Edmund Pezalla of the Duke-Margolis Center for Health Policy in Washington, D.C. and a corporate executive for Aetna (soon to merge with the parent company of one of the largest pharmacy benefit managers [PBMs] in America, CVS Caremark) extolled the virtues of PBMs as honest, effective, and mindful entities that prevent drug prices from skyrocketing and strive to provide the best outcomes to patients. Arkansas pharmacists, especially front-line community pharmacists serving patients in some of the most underserved rural counties in America, see Pezalla’s message for what it truly is: half-truths and political spin for a shadowy industry that is finally being brought into the light.

PBMs are in desperate need of positive news for their industry. The author pointed out success of PBMs in Medicare D prescription drug programs but didn’t disclose that PBMs overcharged Medicare by $9.1 billion over a ten-year period, pocketing the taxpayer money (Wall Street Journal, 1/4/2019). He praises the PBMs for their negotiation of rebates, but neglects to identify rebates as kickbacks that PBMs receive from drug manufacturers in exchange for choosing to include certain drugs on a health plan’s formulary (list of approved medication), even if those drugs are not best for the patient’s health or there is a far less expensive drug with comparable efficacy, while also disregarding that those rebate savings may or may not ever make it to the patient or the employer who is funding the health plan.

Lack of regulatory oversight, lack of fiduciary duty for the PBM, proprietary secret contracts, and purposely designed PBM payment complexity make it impossible for the consumer and employer to verify what percentage of these savings make it to them or not – an intentionally designed system that has allowed PBMs to profit hundreds of millions of both private market and taxpayer dollars.

As Arkansas leads the nation in comprehensive PBM licensure and regulations, it is no coincidence that PBM blowback has begun to hit the Natural State this week. A 2018 special legislative session called by Gov. Hutchinson and an ongoing investigation by Arkansas Attorney General Rutledge into PBM Deceptive Trade Act violations have dragged the PBM business model into the spotlight on a national stage.

At the forefront of this movement are Arkansas community pharmacists, who have testified in legislative meetings, in the press, and to their patients the mountains of evidence across thousands of prescriptions showing PBMs reimbursing pharmacists an average of $12-$14 below the cost for the pharmacist to buy the drug and cover operating costs. Dozens of community pharmacies throughout the state were forced to take out temporary loans to pay their employees and make the heartbreaking decision to turn away patients in desperate need of care to keep the pharmacy from shutting its doors and the community from losing, in some cases, its only healthcare provider. At the same time, these pharmacies under tremendous financial distress were receiving buyout offers from the very PBMs that were underpaying them; the same PBMs that were also paying their own PBM-owned retail network pharmacies an average of $63 more per prescription than the independent community pharmacies.

The worst half-truth of all from the community pharmacist perspective is that PBMs are working to improve patient outcomes. There are likely interventions made in corporate offices and call centers that they believe or have proof are improving patient outcomes. However, they are destroying the pharmacist health care professionals on the ground in local communities and have lost touch with where real healthcare happens every day.

Countless stories from Arkansas pharmacists of PBMs interfering in patient care have been shared over the past year, including the Conway community pharmacist who was able to find life-saving heart medication for a friend during a nationwide drug shortage, but was helpless when the PBM wouldn’t allow the patient to use the pharmacy of his choice, instead directing the patient to a PBM-owned retail pharmacy that couldn’t order the drugs and advising the local pharmacist to counsel his friend on signs and symptoms of cardiac arrhythmias and death.

Arkansas pharmacists also shared stories of how they were financially forced by PBMs to refuse to provide needed medication to treat flu in a pregnant patient, seizure medication for a patient who lived alone, and heart failure medication for an elderly woman who could not read or drive. This is a terrible way to approach patient care. It is also a plan designed by the PBM that interferes with patient choice, is self-dealing, is anticompetitive, and is disruptive to patient-provider relationships.

I, along with Arkansas pharmacists, am completely disheartened and disappointed that PBMs justify their existence by claiming to reduce prescription drug costs and are not instead measured by their ability to improve patient outcomes from optimal medication use or held accountable for patient harm.

Taxpayer-funded plans and employers should run away from the big three PBMs and seek out new models that don’t simply commoditize prescription drugs without any methodology to ensure the medications you are buying actually achieve their intended outcomes. I am proud to live in a state where our pharmacists, state legislators, and governor bravely stood up to this industry to protect patients. I am also encouraged by stories of success in private market benefit models by business owner Steve Bryant in Batesville, Arkansas State University, and the state employees’ and public school employees’ health plan.

Other employers have also begun to look at their success and are pursuing more transparent, patient-centered and fair benefit designs and I encourage every employer in the state to take a closer look at the health plans they fund. The health of your employees could depend on it. __________________

Editor’s note: Dr. John Vinson is the Chief Operating Officer of the Arkansas Pharmacists Association. He can be reached by email at john@arrx.org. The opinions expressed are those of the author.

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