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Transitions Magazine

Transitions is published bi-monthly for members of the APhA New Practitioner Network. The online newsletter contains information focused on life inside and outside pharmacy practice, providing guidance on various areas of professional, personal, and practice development. Each issue includes in-depth articles on such topics as personal financial management, innovative practice sites, career profiles, career development tools, residency and postgraduate programs, and more.

Pharmacy benefit managers: Why so much attention?
Jamila Negatu
/ Categories: Student Magazine

Pharmacy benefit managers: Why so much attention?

The 2017 APhA–ASP House of Delegates charged the Policy Standing Committee with providing additional education on PBMs and their impact on the profession.

You are interning at a community pharmacy. You get a prescription for a blood pressure medication for a commercially insured patient. When you run the claim, you find that the patient’s insurance prefers mail order and the patient will have to pay a $20 co-pay to get it filled at your pharmacy as opposed to $0 co-pay for mail order. The patient takes the prescription back to fill with the mail order and avoid the co-pay. But now you are left wondering, “How did that happen? Why the difference in co-pay?”
 

What are PBMs?

The story above illustrates some of the influence that pharmacy benefit managers (PBMs) have on the practice of pharmacy today. The Pharmaceutical Care Management Association (PCMA) noted that PBMs exist to “reduce prescription drug costs and improve convenience and safety for consumers, employers, unions, and government programs” and projects that PBMs will save up to $654 billion in prescription drug benefit costs over the next decade. 
 
 
PBMs first started in the 1960s to help curb the growing costs of medication therapy. In the time since, PBMs have rapidly evolved into a multi-billion-dollar industry. PBMs are positioned across all major commercial and government insurances with the “Big 3” PBMs considered to be Express Scripts, Optum Rx, and CVS Caremark. The National Community Pharmacists Association (NCPA) has stated that these three make up an estimated 80% of the PBM marketplace and cover more than 180 million patient lives.
 
 
This massive market share allows PBMs to influence many different stakeholders in the pharmaceutical market, from patients to pharmacists to drug manufacturers. PBMs promote cost-reduction strategies via mail order pharmacy, step therapy, and prior authorizations.
 

Concerns of APhA–ASP and NCPA

During the 2016 APhA–ASP Midyear Regional Meetings, Regions 1, 2, 3, 4, and 8 all presented resolutions to the APhA–ASP Resolutions Committee regarding issues and concerns with PBMs. These resolutions addressed the concepts of mandatory mail order, transparency of PBMs with regards to pricing and reimbursement determination, and transparency on the distribution of revenue from drug manufacturer voucher programs. Because of the complex nature of PBM operations, the APhA–ASP Resolutions Committee submitted a motion that was accepted by the 2017 APhA–ASP House of Delegates, charging the 2017–18 Policy Standing Committee with addressing PBM concerns. 
 
NCPA further elaborated that “the lack of transparency in the largest PBMs and the lack of meaningful competition affects patients, pharmacists, plan sponsors, and ultimately taxpayers who fund government-sponsored programs.” 
 

Potential future legislation

Legislators are taking notice. During the current session of Congress, H.R. 1038 (Prevention of Retroactive Reduction of Payments), H.R. 1316 (Require Transparency of MAC [maximum allowable cost] Pricing for Medicare Part D), and S. 637 (Transparency of Drug Rebate Savings Distribution), which address the need to increase the transparency of drug pricing and PBM practices, have all been submitted to the floor.
 
State legislators are also taking notice. Thirty-eight states currently have laws regulating PBM practices, from transparency of MAC pricing to restrictions on deceitful audit practices. This is an area of great change and something to keep an eye on for future legislation. 
 
How is your state legislature taking notice? Talk with your state pharmacy association to learn more about how PBM practices are being regulated close to home. Also, check out NCPA and pbmwatch.com to see how PBMs are being discussed on a national level.

 

 

The 2017–18 APhA–ASP Policy Standing Committee consists of Jason Gaines (NEC liaison), Mary Bradley (Chair), Daniel Galipeau, Adrienne Simmons, and Andrew Stone.

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