Opinion Piece Takes Aim at PBMs

Millions of Medicare Part D patients, and pharmacies that work with them, could benefit from more transparent prescription prices, under a rule proposed by the Centers for Medicare and Medicaid Services. The proposed rule (CMS-4182-P Medicare Program) to lift the ‘shroud of secrecy’ would take effect in 2019.

According to Douglas Hoey, chief executive officer of the National Community Pharmacy Association, the true costs of prescriptions are often kept from consumers and pharmacies by pharmacy benefit managers (PBMs), and only 3 PBMs control nearly 80% of the pharmacy benefit market.

In an opinion piece published recently on thehill.com, Hoey explained that the proposed CMS rule would ultimately result in Medicare Part D patients paying less for their medications and benefitting more from rebates offered by drug companies.

“Consumers don’t receive the full benefit of those discounts, and that’s wrong,” Hoey wrote. In addition, he explained, prescription prices for patients in Part D plans are artificially inflated by PBMs, which often base the cost on a higher amount than what the pharmacy is being reimbursed for the same medication. This results in patients being pushed more quickly into Medicare’s coverage gap, where costs to them are higher. “It’s unfair, and patients don’t even know it happens.”

Furthermore, according to Hoey, retroactive fees charged to pharmacies weeks or months after a Part D prescription has been filled, reduce pharmacy profit margins. In some cases, the profit margin is pennies or even a loss to the pharmacy. The proposed CMS rule calls for greater transparency with those ‘retroactive’ fees. It suggests including fees paid by pharmacies to a Part D plan’s PBM in the negotiated price of a drug at the point of sale, through price concessions. This would also result in more of the rebates and discounts going to patients, rather than savings to Part D plans or their PBMs.

Other aspects of the proposed rule would prohibit PBMs from limiting patient access to their choice pharmacies, which would especially help those in underserved areas, and excluding community pharmacies from Part D network. Hoey explained that some pharmacies are excluded from Part D, based on services offered that are in addition to retail pharmacy.

Overall, the proposed rule would enact changes estimated to reduce net patient beneficiary costs by $10.4 billion over 10 years. Hoey concluded it creates a fairer system that is good for independent pharmacies and will result in better health outcomes.


Hoey D. Patients, not PBMs, should decide which pharmacy they use. http://thehill.com/opinion/healthcare/367407-patients-not-pbms-should-decide-which-pharmacy-they-use?utm_content=buffera061d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer. Published Jan. 4, 2018. Accessed Jan. 5, 2018.

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