Patients, not PBMs, should decide which pharmacy they use

Patients, not PBMs, should decide which pharmacy they use
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Would you be willing to take part in a high-stakes card game where one player at the table can see every other player’s cards?

You might as well play with a blindfold on. When your opponent holds all the cards, sees all, knows all and controls all, you’re going to lose.

That’s the situation for millions of Medicare Part D patients and their families, as well as the physicians and pharmacists who work with them. The deck is stacked against them all, because pharmacy benefit managers hold all the cards — and they control the game.


For patients in Part D plans, the price they pay for a prescription at the pharmacy counter is directed by their Part D plan’s pharmacy benefit manager and is often based on an amount that is higher than that which the pharmacy is being reimbursed for the same prescription.  

This artificially drives up the price that is ultimately assessed against a patient’s Medicare deductible. That, in turn, has the effect of pushing the patient more quickly into Medicare’s coverage gap, where the costs to the patient are much higher. It’s unfair, and most patients don’t even know it happens.

For community pharmacies, it’s just as bad. Imagine settling up when the card game ends, then finding out weeks or months later that you have to give up some or all of your winnings to those all-knowing PBMs. You’d likely think it was terribly unfair.

Community pharmacies live with that kind of inequity every day, because weeks and months after a Part D prescription is filled, the plan’s PBM charges the pharmacy with retroactive fees that sometimes reduce their profit margin to pennies — or even leave the pharmacy upside down on the transaction.

No way to run a business, you say? You’re right about that, but there’s a solution in the works that could change the game for the better, for patients and the pharmacies that serve them.

The Centers for Medicare and Medicaid Services has a proposed rule on the table that can result in Part D participants playing less for their medications. As it stands now, drug companies offer rebates, but a big part of that savings goes to PBMs, the middlemen between drug manufacturers and pharmacies and their patients.

Consumers don’t receive the full benefit of those discounts, and that’s wrong. In fact, because the PBM business model is shrouded in secrecy and because just three PBMs control nearly 80 percent of the pharmacy benefit market, everyone else has blinders on. Patients and pharmacies have no idea what the final cost of drugs are. PBMs know — and they get discounts and rebates that they don’t pass on to consumers. That means consumers pay more for drugs than they need to.

The CMS proposed rule, which would take effect in 2019, calls for greater transparency. The rule suggests including in the negotiated price of a drug at the point of sale all fees paid by pharmacies to a Part D plan’s PBM through price concessions. That means simply that more rebates and discounts end up in savings for patients at the pharmacy counter and not in the pocket of Part D plans or their PBMs.

The proposed rule also could help pharmacists get more transparency into business-killing retroactive fees. And perhaps best of all, the rule reduces net patient beneficiary costs by $10.4 billion over 10 years, making it a win for everybody.

In addition, the proposed rule would prohibit PBMs from limiting patient access and excluding community pharmacies from participation in Part D standard networks simply because the pharmacies offer additional services in addition to being a retail pharmacy — services like compounding and home delivery.

Under the proposed rule, plans must also provide standard terms and conditions to pharmacies in a timely fashion so that they have the opportunity to decide if they want to participate in Part D standard networks. That will allow Part D participants — the patients — greater pharmacy choice, and that’s important, especially in underserved areas. Patients, not PBMs, should decide which pharmacy they use.

The National Community Pharmacists Association supports the proposed rule (CMS-4182-P Medicare Program). It’s good for seniors, and it’s good for independent pharmacies. Let’s stop making prescription drug services a game that no one except a PBM can win. Let’s finalize this proposed rule and move on to driving better health outcomes for seniors.

B. Douglas Hoey is a pharmacist and chief executive officer of the National Community Pharmacists Association.