One way or another, it looks like the drug supply chain middlemen known as pharmacy benefit managers, or PBMs, are going to be pulled out of the shadows. And that’s good news for patients, especially for those living with chronic conditions.
Most recently, the Senate Finance Committee held hearings taking PBMs to task and issued a new legislative framework with proposed policy solutions to hold the middlemen corporations accountable. The trade association representing the PBMs recently found itself in front of another congressional committee, this time with House Energy & Commerce, in a hearing where PBMs faced additional scrutiny.
These actions are welcome — and long overdue.
That’s because, whether people are aware or not, PBMs affect virtually everyone who has ever filled a prescription. PBMs decide which medicines to include — and exclude — on health plans. They also negotiate with drug companies for rebates. In 2021 alone, drug companies handed out more than $200 billion in discounts on prescription drugs, with a considerable share flowing through PBMs.
Unfortunately, patients don’t normally see these savings, though — at least not when they go to fill prescriptions. PBMs are not required to disclose rebated prices, nor must they or insurers pass along these discounts to patients taking the medications. For patients who face chronic conditions, this becomes even more concerning. Take diabetes and insulin, for example.
More than eight million people in the U.S. rely on insulin to regulate their diabetes. A bipartisan Senate Finance Committee report, Examining the Factors Driving the Rising Cost of a Century-Old Drug, found PBMs secured rebates for insulin as high as 70 percent, but patients aren’t finding relief at the pharmacy counter. It has been reported that PBMs paid as little as $52 per vial while charging some patients as much as $350. Several companies that manufacture insulin have announced additional price reductions on insulin specifically, yet price realities for patients remain high.
Clearly, something isn’t working. And something needs to change.
It’s been reported that if drug-maker rebates were passed directly to patients at the point of sale, the average diabetes patient would save close to $800 annually. That is real money. Such savings could make a big difference in many people’s lives.
What’s more, for people who live with chronic conditions, it’s essential that they take medications as prescribed. Unfortunately, roughly three in 10 adults report that they have stopped taking a medication, or taken less than prescribed, due to cost. For patients with a chronic disease, like diabetes, heart disease, or hypertension, nonadherence for cost reasons surpasses 50 percent. Many patients end up in emergency rooms — or worse — as a result.
Thankfully, policymakers have signaled that they’re ready to crack down on the questionable practices of PBMs. In addition to the congressional interest in this important topic, the Federal Trade Commission announced last summer that it is launching a probe into the PBM industry, including its opaque methods for determining drug pricing.
Lawmakers have the tools and authority they need to stop PBM abuses. Now is the time for reforms. The longer we wait, the sicker patients will get, and the more they will need care that could have been completely avoided if they’d been able to access and afford their medicines as prescribed.
Shifting profits to PBMs is not the answer for the millions of American families managing one and often multiple chronic conditions, and it’s certainly not the answer for our already ailing healthcare system riddled with personnel shortages and an increasingly sick population.
The actions lawmakers take now could be a pivotal point for patients. What are we waiting for?
About the Author
Kenneth E. Thorpe
Kenneth E. Thorpe is a professor of health policy at Emory University and chairman of the Partnership to Fight Chronic Disease. He wrote this for InsideSources.com.