Pennsylvanians Suffer while Pharmacy Middlemen Profit | PBM Reform Podcast Series

Pennsylvanians suffer while pharmacy middlemen profit By Suzanna Masartis Pennsylvanians are getting crushed by the costs they face at their neighborhood pharmacy counter. The situation has grown so bad that a shocking one in five Keystone State residents report they are unable to take their medications as prescribed due to the cost burden.[1] As a lawmaker and an advocate who speaks to patients in Pennsylvania every day with liver disease, diabetes and other chronic conditions, I am convinced more strongly than ever that we need to reform the prescription drug supply chain. To understand how we got here we need to understand what’s driving increasing costs. A new report found that, in 2020, manufacturers of brand-name and generic medications received only 37 cents of each dollar of the more than $680 billion spent on medications. If you look exclusively at manufacturers of brand-name medications, the drug makers are taking in just under 50 cents on the dollar. So where is the money going? Turns out that it’s little-known middlemen corporations, Pharmacy Benefit Managers (PBMs), that are taking a bigger and bigger share of the pie.[2] PBMs were created to negotiate with insurers and drug manufacturers and establish which prescription drugs are covered by a health plan. In reality, they demand steep discounts from drug makers off of the original list price as a condition to include those drugs on the approved list of medications – and then keep the savings for themselves. But here's the real rip-off: Patients at the pharmacy counter still face co-insurance charges based on the list price -- not the discounted price insurers actually pay. In other words, PBMs are enriching themselves while hiking prices for the rest of us. {3} Worse still, PBMs manipulate their powerful market position to reduce the availability of prescription medications by excluding them from formularies. PBMs make their money when they demand exorbitant rebates from drugmakers and charge patients full cost, meaning they prefer to include drugs with higher list prices on their formulary over an equally effective drug with a lower list price. As a result, a number of drugs are excluded from formularies because PBMs can’t make as much money from them. In 2020, the three largest PBMs excluded 846 FDA-approved drugs, denying patients access to more medications than ever before. This market manipulation has disastrous results for patients. A study published last year found that these practices, called “drug utilization management,” can lead patients to abandon their prescribed medications and delay treatment. Approximately 20% of prescriptions in the U.S. are never filled, according to the study.[4] This outcome is simply unacceptable, and our leaders need to take action. Congress needs to ensure that any attempt to rein in out-of-pocket prescription drug costs includes taking a close and hard look at PBMs. Doing so would go a long way toward ensuring every patient and healthcare consumer in our state can access and afford to take their medications as prescribed by their doctor. Suzanna Masartis of Pittsburgh is the CEO of the Community Liver Alliance. [1]https://www.healthcarevaluehub.org/advocate-resources/publications/pennsylvania-residents-worried-about-high-drug-costs-support-range-government-solutions [2]https://ecommunications.thinkbrg.com/44/2328/uploads/brg-pharmaceutical-supply-chain-2022.pdf?intIaContactId=24HydQaSTYqd85tTztTDcQ%3d%3d&intExternalSystemId=1 [3] https://www.fiercehealthcare.com/payer/study-drug-utilization-costs-health-industry-93b-a-year-patients-bearing-most-cost [4] https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.00036 Learn more about your ad choices. Visit megaphone.fm/adchoices