Time to stop inappropriate PBM business practices

That’s the message the newly-formed “PBM Reform Coalition” is taking to Congress when asking for appropriate reforms that rein in the improper behaviors of PBMs that participate in Medicare Part D.

PBMs are the relatively unknown, unregulated middlemen that manage prescription drug benefits for employers, unions, health plans and other payers. They were created to process and pay claims, and control the cost of drug coverage and utilization through appropriate benefit design, pharmacy auditing, benefit-utilization management programs, and the development of drug formularies.

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Without sufficient regulation or oversight, PBMs have been largely playing by their own rules, engaging in business practices that are hurting patients and their pharmacies and represents a departure from their legitimate roles as auditor, price negotiator and prescription drug benefit middleman.

These inappropriate behaviors -- which include improper audits of pharmacies; unfair, inconsistent and non-transparent reimbursement rates, especially as it relates to generic drugs; and improper use of patient information --- have fueled the recent growth and profits of PBMs on the backs of taxpayers, patients and community pharmacies, and at the expense of patient choice and privacy. The net result is a lack of access for patients to their local pharmacy and health care providers and the critical services that they provide.

For example, when auditing pharmacies, PBMs often target expensive drug claims and identify trivial errors to disallow the claim and recoup the payment, pocketing thousands of dollars.  These are valid prescriptions filled and dispensed for the patient per the physician’s prescription order. This practice results in patients and pharmacies footing the bill for prescriptions that should be covered, while the PBM reaps all the rewards.

The cost of these improper audits goes beyond the financial impact, and unintentionally, can affect the quality of care.  According to a 2011 survey of 1,850 community pharmacists, excessive PBM audits are resource intensive and decrease the time pharmacists can devote to patients.  A pharmacist’s number one priority is to provide quality health care to their patients. In addition to dispensing prescriptions, this also includes face-to-face counseling, administering life-saving vaccinations, conducting important health care screenings and many more essential activities. However, pharmacists are increasingly spending their time defending legitimate claims. 

Contrary to PBM rhetoric, the contracts that pharmacies receive from PBMs in many respects are NOT negotiable and do not disclose the methodology or terms and conditions for payment of generic drugs.  This enables PBMs to adjust reimbursement rates to pharmacies at any time, without notice, in order to increase the spread between what they are billing employers and plan sponsors and reimbursing pharmacies – and they do.  Instead of passing on any savings that may be achieved through rebates or other methods, PBMs pocket the difference..

This practice results in patients and plan sponsors paying unnecessarily high prices for prescriptions, and is especially problematic in the Medicare program, where taxpayers are on the hook for any overpayments.

Finally, many PBMs own their own mail-order pharmacies and go to great lengths to steer patients toward these facilities – even using private data to require patients to fill certain prescriptions through their mail-order programs rather than through their local pharmacy.  Although mail-order is a good option for some patients, it is not preferred by all and patients should not be denied the opportunity to decide for themselves whether or not to use mail-order programs.

Members of the PBM Reform Coalition, which can be found at www.rxchoiceandaccess.com, believe patients and their pharmacies deserve better and are committed to stopping these inappropriate behaviors.

Moving forward, we look forward to working with policymakers and others to advance appropriate reform measures to protect pharmacies and their patients included in the bipartisan Senate Bill 867 – measures that keep health care costs down and allow pharmacies to remain focused on their top priority, which is serving patients to the best of their ability.

For too long, PBMs have played by their own rules, engaging in these questionable practices that are hurting taxpayers, patients and their pharmacies.  These must stop.

Wiesner is vice president of the Texas State Board of Pharmacy and serves as the spokesman for the PBM Reform Coalition. He is currently employed by H-E-B, a Texas Food-Drug chain, as senior director for Privacy, Pharmacy, and Governmental Affairs with responsibilities for company privacy policies and compliance along with pharmacy regulatory, government, and industry affairs.