Editorial: How PBMs are changing pharmaceuticals
Nov 09, 2011 | 291 views | 1 1 comments | 3 3 recommendations | email to a friend | print
You like going to the corner drugstore when you need to pick up a few things - aspirin, cough medicine for the kids, shampoo, household items and your prescriptions - all in one stop. You might even know your pharmacist by name, and he or she gives you advice on how to take your medications the right way. Or your drugstore has a walk-in health clinic where you can take your kids to get a flu shot or see a nurse in the middle of the night. Going to the drugstore -- any one you want -- is a normal part of life for millions of families across the country whether they’re at home or traveling.

Well, you can say goodbye to that -- if certain fat cats in the health care industry have their way.

Behind the scenes, a middleman in the system is slowly gaining power, market dominance and profits, at your expense. You’ve probably never heard of them. But they have the power to dictate where you can fill your prescriptions and what medicine you take, make you switch pharmacies and break a trusted relationship with your pharmacist -- with absolutely no benefit to you,

They’re called “PBMs” -- pharmacy benefit managers. Their job is to help companies manage the prescription drug benefits in their health plans and lower costs that companies pay for health care. We all know that’s important. So PBMs can serve a helpful purpose. The problem is: some of them are more interested in serving themselves than you.

For instance, PBMs say they lower costs by squeezing pharmacists. But where do the savings really go? Nobody knows for sure. Here’s a clue: while prescription reimbursements fell over the past three years, PBM profits rose almost 20 percent. Think about it: these middlemen got a 20 percent raise at the same time corporate profits were stagnant and millions of Americans struggled with a terrible recession, rising unemployment, falling incomes and skyrocketing health care costs.

But a 20 percent raise wasn’t enough for the PBMs. One PBM executive has griped that consumers prefer to go to the drugstore to get their prescriptions instead of through the Internet or mail. Why the complaint? Well, because mail order means less cost and more profits for the PBM. Mail order is fine for many people who have a pharmacist to help. But PBMs prefer that if you have questions about their medications, how to take them and how they might interact with others, dial a PBM call center and talk to a faceless voice thousands of miles away.

One way PBMs make even more money is by getting “rebates” from drug makers for buying more expensive versions of the same drug. They decide whether to include or exclude those drugs based on whether they get a rebate. In other words, they pick the medicine you can take based on what they can make. They also make more money when you don’t order the medication you need -- or forget to take your pills - because then they don’t have to pay for it.

PBMs are strange animals. Most businesses in America make money by making people’s lives better, yet PBMs make money by making things worse.

They make money when you don’t take your medicine, when you take the most expensive medicine, when your mailman hands you a prescription versus your pharmacist, when you have to drive farther to go to the drugstore, and even when you have to take your kids to the emergency room for a minor illness or injury when a nurse practitioner is available at the corner pharmacy.

If you think this is a bad situation now, just wait. Two of the largest PBMs in America, Express Scripts and Medco, are planning to merge to create a super middleman, take over half the market, and amass even more profits and power to dictate where and how consumers get their medications.

Already, Express Scripts is making it impossible for its patient members to continue going to the largest pharmacy chain in America, Walgreens, because the PBM cares more about squeezing the drugstore for profits than protecting consumer choice and convenience. After the merger, nobody’s drugstore will be safe.

The problem is, unlike most health care players, PBMs are virtually unregulated. That means no rules and nobody watching to make sure they play fair.

Fortunately, that may be changing. As the Center for American Progress Action Fund testified before Congress last December, “between 2004 and 2008, the three major PBMs have been the subject of six major Federal or multi district cases over allegations of fraud, misrepresentation to plan sponsors, patients and providers; unjust enrichment through secret kickback schemes; and failure to meet ethical and safety standards.”

A number of state and Federal lawmakers recently have proposed measures to prevent such abuses.

But employers and others with health plans - including local, state and Federal governments with taxpayer-funded plans- also need to crack the whip. They need to make sure the PBMs they hire to manage prescription benefits for citizens are acting in good faith, passing along the savings they squeeze from the system and protecting the consumer’s right to visit any drugstore they like.

LSN

Editorials represent the opinions of this newspaper, and not of any one individual.

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November 10, 2011
You likely have a number of benefits offered by your employer or health plan. The one you use the most is probably your pharmacy benefit.

As a pharmacy benefit manager (PBM), Express Scripts works with your plan sponsor to make sure you get the most out of your benefit -- lower costs and broad access to prescription medicine.

Express Scripts and other pharmacy benefit managers negotiate with pharmaceutical companies and pharmacies to ensure that you are getting the medicines you need at the lowest price possible.

Let’s be clear: pharmacies have been and always will be essential partners in advancing our mission. More than 60,000 pharmacies of all sizes and locations have chosen to participate in our retail network, including 90 percent of all independent pharmacies. PBMs help pharmacies by providing benefits of modern technology, instant adjudication of prescriptions and notifications of harmful interactions and contraindications.

We do offer the convenient and cost-effective option of home delivery to our clients. If you have a chronic disease, such as high cholesterol or high blood pressure or diabetes, taking a generic drug and having it delivered to you at home is the least costly option. Again, it is an option, one of many, that are available to plan sponsors to offer to their employees. Our goal is to make sure that you receive your medicine in the most convenient, cost-effective way possible.

Combining Express Scripts and Medco is an opportunity for two leading PBMs to apply private sector know-how to solve our country’s biggest healthcare challenge: lowering the cost of healthcare while raising the quality.

By joining complementary strengths, the proposed merger will benefit the nation’s patients, employers and managed care plans, leading to safer and more affordable medicines for American families.

PBMs drive out pharmacy fraud, waste and abuse while lowering costs and improving health outcomes. We increase adherence to prescribed medicines, proactively identify and correct prescription errors and ensure cost-effective delivery of medicines. Our efforts save billions of dollars and extend millions of lives.

As a combined company, we’ll collaborate with pharmacies, physicians and benefit plan sponsors to further improve America’s healthcare beyond what either company can do on its own. Express Scripts and Medco have well-established histories of doing what’s right for patients. The merger would accelerate our ability to do even more.

Brian Henry

Express Scripts
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