- AIPC Rx
Government agencies and states look to further regulate PBMs
Many consumers are unhappy with how their prescriptions are handled
Consumers have been up in arms over problems they’ve had with pharmacy benefit managers (PBMs) for years, but companies like Cigna’s ExpressScripts, CVS Caremark, and UnitedHealth’s OptumRx have continued to grow by leaps and bounds. However, aid for consumers may soon be on the way.
Last week, the U.S. Department of Justice (DOJ) announced that it will attempt to block UnitedHealth Group’s acquisition of Change Healthcare, a company that provides payment and revenue cycle management to connect payers, providers, and patients in the health care ecosystem.
Consumers have the National Community Pharmacists Association (NCPA), in part, to thank for that effort by the DOJ. Last September, the organization publicly called for DOJ officials to block the merger, saying it would produce an unfair competitive advantage for a company that is already one of the kings of the PBM hill.
NCPA kept the heat on regulators, repeatedly raising concerns with the DOJ and the Federal Trade Commission (FTC) about the proposed acquisition and the broader vertical consolidation that is happening in the industry. The group alleged that UnitedHealth Group’s access to Change Healthcare's eRx system would be devastating to patients and independent pharmacies.
In arguing its case, the NCPA had plenty of ammunition that consumers aren’t happy with the current PBM-driven prescription world. Survey respondents spoke loudly about their dissatisfaction with health insurance plans and their PBMs. Namely, the participants took umbrage with how PBMs and insurance companies get to decide which pharmacies patients must use and whether they must use more expensive medicines when there is a less expensive alternative available.
Getting more regulators on board
Getting the DOJ to add some muscle to its efforts is a major plus for the NCPA, but “there is far more for agencies like the DOJ and FTC, Congress, and state policymakers to act on in order to rein in PBMs and create a fairer, more competitive health care marketplace for consumers,” said NCPA CEO B. Douglas Hoey.
Before the DOJ announced its intent to block the UnitedHealth/Change Healthcare deal, the FTC had actually voted against fielding a study of PBMs and their business practices. But the agency apparently had a change of heart and has now decided that it might be a wise move to ask the public how it feels about the impact of PBMs after all.
Requests for Information like the one the FTC has launched regarding PBMs can make a huge impact, and the agency is asking patients, employers, pharmacies, and any other entity that deals with prescriptions to comment on any issues or concerns they believe are relevant to the PBM situation. Interested parties have until April 25, 2022, to submit their comments on the FTC's website.
Michigan further regulates PBMs
While things are brewing in D.C., Michigan regulators have decided they're going to do something about PBMs too. On Wednesday, Gov. Gretchen Whitmer signed bipartisan bills designed to lower prescription drug costs by regulating PBMs that oversee coverage for employers, insurers, and others. Part of the laws took effect immediately, and the rest will go into effect beginning in 2024.
“Without question, Michigan's new PBM bill is one of the most significant wins for consumers in years because it deals directly with several ‘back end’ practices that are known to generate billions in revenue for insurers but do nothing to lower costs for patients and plan payers,” Monique M. Whitney, executive director of Pharmacists United for Truth and Transparency, told ConsumerAffairs.
Whitney says she hopes that Witmer’s support will help the pro-consumer movement pick up steam across the rest of the U.S.
“Besides important transparency requirements in the PBM licensing and regulation, Michigan patients will have protections generally not found elsewhere in the U.S., including the right to fair and impartial information about drug pricing and coverage (and access to lower cost alternative drugs) and exclusive authority over their own prescription transfers," she said.
Michigan might not be alone for long. Community pharmacists in Kentucky are leaning hard on its legislators to pass a bill designed to “prohibit insurers, pharmacy benefit managers, and other administrators of pharmacy benefits from imposing certain requirements on health plan insureds.”
“[This bill] would address the mail order mandates and ensure Kentuckians have safe, reliable access to the brick-and-mortar community pharmacy they choose,” wrote Cathy Hanna, president of the Kentucky Pharmacists Association. “This protects a critical link in Kentucky’s healthcare chain, particularly in rural communities where pharmacists are often the most direct and trusted provider contact for many individuals and families.”