Opinion: Stabenow grills middle men behind prescription drug cost
Michigan patients deserve access to affordable prescriptions, but too often, the health care system in the United States – and here in Michigan – stands in their way.
High co-pays, the recent decision by some insurers to no longer allow patients to save with manufacturer coupons, a maze of prior authorization and fail first rules and regulations, prescription drug middlemen called pharmacy benefit managers (PBMs)– the list of obstacles standing between a patient and her treatment seems to grow by the week.
Patient advocacy organizations like the Sickle Cell Disease Association work to support individuals struggling with devastating diseases, illnesses and injuries, and we’re not alone. Here in Michigan, patients are fortunate to have an ally in Senator Debbie Stabenow.
Senator Stabenow is a member of the important U.S. Senate Finance Committee, which this week convened a hearing to get answers on a growing scandal that’s contributing to the high out-of-pocket costs for many prescription drugs – the practices of so-called PBMs.
You probably haven’t heard much about PBMs, and that’s the way they like it. The largest, a company called Express Scripts, is actually bigger than McDonalds, Disney, and Eli Lilly combined. They get that big by standing in between prescription drug manufacturers and the insurers and pharmacists who dispense prescription drugs.
To hear PBMs tell it, they negotiate better prices for consumers. They just happen to make hundreds of billions of dollars during the process, which critics contend, proves they’re actually causing patients’ out-of-pocket costs to skyrocket.
Senator Stabenow put it succinctly during the hearing, when she told a panel of PBM executives that ‘with all due respect, you guys are pretty bad negotiators.’1
They’re much better at inflating costs. PBMs use processes called “markups” and “clawbacks” to inflate costs and rake in profits, and one of their recent moves to protect their bottom line has drawn the attention of Congress. One of the PBMs, a company called OptumRx sent a letter demanding drug manufacturers make changes in the way they price their medicine that observers say would protect PBM profits at patients’ expense.
The letter had to do with drug rebates that PBMs collect from drug companies in exchange for favorable placement of their medicine on formularies, the lists of medicines that patients can access under their health insurance plans.2 (PBMs essentially tell drug makers they have to pay them if they want patients to ever access their product.)
The letter comes as drug manufacturers attempt to lower the prices of many medicines to help lower out-of-pocket costs for patients, but OptumRx has demanded drug makers continue providing rebates at the same levels – a move that would essentially eliminate the manufacturers’ ability to lower prices at all.
The whole “rebate” process has come under intense fire in Congress and from President Trump.3 Now Senator Stabenow and her colleagues are digging for answers. This week they called to testify senior officials from 5 of the nation’s biggest PBMs, including OptumRx, the PBM that handles the state of Michigan’s pharmacy benefits for state employees, retirees, retired teachers.
This isn’t Senator Stabenow’s first time dealing with PBMs. She lead the fight to pass legislation that finally banned PBMs’ longstanding practice of requiring pharmacists to sign gag clauses that prohibited them from telling patients they could save money by buying their medicine with cash, instead of with an insurance company co-pay card.
It was an important reform that empowered patients and lowered health care costs. Hopefully this latest hearing was the first step towards the next critical pro-patient reform.
Wanda Whitten-Shurney is CEO and Medical Director of the Sickle Cell Disease Association of America, Michigan chapter.