Daily Rise: Pharmacy Benefit Managers Drop Vital Medications, Collect Billion-Dollar Rebates

Pharmacy Benefit Managers Drop Vital Medications

Should pharmacy benefit managers be allowed to drop vital medications from plans, leaving patients without the treatment prescribed by their doctor?

Stacey L. Worthy, executive director of the Alliance for the Adoption of Innovations in Medicine (known simply as Aimed Alliance), poses that question in a recent piece published at The Hill.

“While it may be inconceivable or even unconscionable to cut off access to life-saving treatment for stable patients with diseases, such as cancer, diabetes, arthritis, and psoriasis, insurers and pharmacy benefit managers (PBMs) are doing just that,” Worthy writes.

Pharmacy benefit managers aren’t ashamed of their actions to block patient’ access. In fact, they’re growing more bold. CVS Health, which just posted billions of dollars in quarterly revenue, has recently announced plans to drop three dozen treatments. CVS Health is now denying a total of 155 vital treatments.

When pharmacy benefits managers drop coverage of treatments, this “non-medical switching” affects patients’ ability to fight off fatal diseases.

“Over the years, cancer went from a death sentence to a survivable disease thanks to new and innovative treatments, but a practice few know about—nonmedical switching—makes the disease a potential death sentence yet again,” Worthy explains. “The PBM or insurer requires the patient to use a different medication regardless of what the patient’s doctor prescribed—sometimes without the doctor’s knowledge—and regardless of whether the switch will cause adverse events or a diminished quality of life. In doing so, the PBM or insurer takes on the role of doctor, despite a lack of medical expertise or an understanding the individual patient’s needs.”

PBM Rebates: Discounts Intended for Patients

Dropping vital medications is only one-half of pharmacy benefit managers’ profit scheme. The other half: collecting billions of dollars in drug rebates intended for patients.

Over at Morning Consult, Aimed Alliance’s Stacey Worth, who has clearly been very busy writing, explains that pharmacy benefit managers are “getting rich” from high drug prices by siphoning off the drug rebates intended for patients.

“It is no longer a secret that drug companies pay billions in rebates to PBMs to reduce the price of their medicines,” Worthy points out. “The question is how much of these savings get passed onto insurers, employers, and ultimately consumers.”

Part of the problem has been the secrecy surrounding pharmacy benefit managers operation. Employers often can’t examine the contracts to assess PBMs contracts.

“According to estimates from ZS Associates, a pharmaceutical marketing consulting firm, drug companies pay about $40 billion annually in rebates with the size of the rebate averaging 30 percent of a medicine’s sales,” she reports. “Management Institute survey found about one-quarter of employers received none of the savings from rebates provided to PBMs.”

Know Your Jargon: Pharmacy Benefit Managers

Of course, many patients are likely wondering: what exactly is a pharmacy benefit manager?

What They Are: Insurance companies and big companies outsource the administration of drug benefits to PBMs, which frequently save money by limiting patients’ access to life-saving treatments. Think of them as the middleman that does the dirty work encouraging patients to fail first.

Why They’re Bad for Patients: PBMs operate entirely in secret. Even PBM clients can’t access information. Susan Hayes, who works as an auditor of PBM contracts, told USA Today in February, that “auditors aren’t allowed to copy or take pictures of documents when they audit a PBM’s rebate contracts… In recent proposals from Caremark that she reviewed for clients, Caremark provided a flat amount for a rebate and not 100% of rebate savings.”

In the News Today: The U.S. Department of Justice is taking notice of the secrecy and questionable practices surrounding pharmacy benefit managers, and has launched federal investigations of PBM contracts, according to BioPharmaDive.com.

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