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WASHINGTON — In recent testimony before the House of Representatives Energy and Commerce Subcommittee on Health, National Community Pharmacists Association (NCPA) chief executive officer B. Douglas Hoey said pharmacists can drive better health outcomes and reduce costs, but first pharmacy benefit managers’ problematic business practices must be addressed through legislative and regulatory channels.
As an example of one solution, NCPA urged support for the Centers for Medicare & Medicaid Services’ (CMS’) proposed rule addressing the PBM-generated direct and indirect remuneration (DIR) fees in Medicare Part D.
B. Douglas Hoey, NCPA
“Over the past few years, the Center for Medicare & Medicaid Innovation has been testing new payment and care models across hundreds of community pharmacies,” Hoey told the Subcommittee, “Early findings suggest high patient satisfaction, improved outcomes and reduced overall health care spending, with reductions of greater than $1,000 per year for those patients who received high-level clinical intervention. To achieve that future promise, however, systemic barriers must be overcome. We believe intermediary parties — pharmacy benefit manager “middlemen” — are increasing pricing complexity and contributing to higher prescription drug costs.”
In his submitted testimony, Hoey said, “The overly concentrated and largely unregulated PBM industry exerts immense influence over how prescription drugs are accessed by the majority of Americans. Given the fact that the federal government is the largest single payer of health care in the United States, it makes financial sense for Congress to demand increased transparency into this aspect of the prescription drug marketplace in order to identify potential savings. In addition, Congress could enact commonsense legislation to address the proliferation of PBM-generated pharmacy DIR fees to lower out-of-pocket costs to Part D beneficiaries and reduce federal government Medicare Part D spending.”
Hoey also recently wrote an article in The Hill, where he explained that CMS has a proposed rule on the table that can result in Part D participants paying 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,” he noted.
In the article, he pointed out that 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% 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.”
He said 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.”
Hoey said the proposed rule could also 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.
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 NCPA 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,” he concluded.
