Wyden “C-Thru” Bill Helps Pull Back Curtain on Duplicitous PBM “Rebates,” Suspect Pricing Schemes, Related Anti-Competitive Behavior

Noting a torrent of bipartisan legislation recently introduced requiring Pharmacy Benefit Manager (PBM) drug middlemen to pull back the curtain on veiled, opaque pharmaceutical pricing practices, the Senior Care Pharmacy Coalition (SCPC) today backed Sen. Ron Wyden’s (D-OR) “Creating Transparency to Have Drug Rebates Unlocked Act” (C-THRU) bill. The legislation requires PBMs — for the first time — to publicly disclose data regarding “rebates,” “discounts” and other accrued payments — and their impact on Medicare Part D beneficiaries and the Part D program overall.

“PBMs are under heavy scrutiny on both sides of the aisle due to their stubborn, blanket and unjustifiable resistance to transparency — and SCPC strongly supports Senator Wyden’s ‘C-THRU’ bill as a way to lift the veil of secrecy surrounding PBM behaviors that result in higher costs to consumers and lower savings for the Medicare program,” said Alan G. Rosenbloom, President and CEO of SCPC, which advocates for the nation’s long term care (LTC) pharmacies.

Continued Rosenbloom, “Senator Wyden is precisely correct in his observation that ‘the public knows virtually nothing about whether PBMs are saving money for the consumer or pocketing it themselves’.” The SCPC President and CEO pointed to a damaging January 2017 Centers for Medicare & Medicaid Services (CMS) report finding that drug companies, wholesalers and pharmacies are paying larger rebates and hidden fees to PBMs and insurers — but that PBMs are keeping the money rather than translating it into lower costs for beneficiaries or government health care programs.

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Bill to help small pharmacies passes state senate

A bill sponsored by Sen. Steve Neville, R-Farmington, aims to help small pharmacies by eliminating fees they currently pay to middlemen.

“The small pharmacies around the state are having a hard time surviving,” Neville said when reached by phone today.

Neville worked with the New Mexico Pharmacy Business Council to draft the bill, which would prohibit pharmacy benefits managers from charging the pharmacies fees for claim processing and adjudication. Pharmacy benefits manager are third-party middlemen of prescription drug programs. These middle men check patient eligibility, administer plan benefits and negotiate costs between the pharmacies and the insurers. Each insurance company contracts with a pharmacy benefits manager.

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An End to PBM Pick-Pocketing

Usually when your pocket has been picked, you discover the loss pretty quickly. But many of America’s more than 22,000 independent community pharmacies are finding their reimbursements for prescription drugs reduced well after the patient hands over the co-pay and leaves with their medicine. The technical term for this transaction is a “retroactive pharmacy direct and indirect remuneration (DIR) fee.” That’s one way of putting it.

DIR fees pick the pockets of community pharmacies and their patients.

Pharmacies dispense medication and are reimbursed, only to have a portion of that reimbursement then “clawed back” by pharmacy benefit managers weeks or months after the transaction. There’s often no way to anticipate the fees, and pharmacists are seldom provided sufficient justification for the clawback.

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Middlemen’s Secret Drug Rebates Targeted by Wyden’s Bill

Senator Ron Wyden proposed legislation that would force drug middlemen to disclose secret discounts they receive from manufacturers, a sign of growing scrutiny of the role played by pharmacy benefit managers in high prices.

The bill would require pharmacy benefit managers such as Express Scripts Holding Co. and CVS Health Corp. to reveal the aggregate rebates that they receive from drug companies for Medicare plans and post the amounts on a government website, according to a statement from the Oregon Democrat’s office. While it may not pass in a Republican Congress, the proposal calls further attention to PBMs while drug prices are in the crosshairs of Washington lawmakers and President Donald Trump.

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Drug Costs Too High? Fire the Middleman

A decade ago, Caterpillar Inc. looked at its employee drug plan and sensed that money was evaporating. The bills for pills had increased inexorably, so the company started to rein in its pharmacy benefit manager, or PBM. The managers are middlemen with murky incentives behind their decisions about which drugs to cover, where they’re sold, and for how much.

 In a decade when the average American’s drug spending has spiraled higher, the figure has fallen at the company. By hiring its own doctors and pharmacists, among other changes, Caterpillar has saved tens of millions of dollars a year. “The model is as successful today as it’s ever been,” says Todd Bisping, a global benefits manager at the company.

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Lower drug costs: The PBM role

The public debate around the cost of prescription drugs has unfairly turned on the one player in the system reducing drug costs – pharmacy benefit managers or PBMs.

The California Legislature is considering new, misguided legislation affecting the PBM industry. A simple understanding of the industry shows that more regulation is a bad idea that will increase drug costs.

A PBM is a health care company that contracts with insurers, employers, government programs and others to administer the prescription drug part of a health care benefit. If you have a prescription drug card, chances are that you are working with a PBM to get your prescriptions filled.

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To Improve Pharmaceutical Pricing, Reform PBMs And Fix Health Care’s Systemic Problems

Accusations that pharmaceuticals are driving the problem of health care affordability abound. But, political misdiagnoses are just as problematic as medical misdiagnoses. Policies based on the wrong political diagnosis will not solve the health care affordability problem, and could cause irreparable harm to medical innovation.

The misnomer that drug prices are a primary cause of the health care affordability problem persists, in part, due to the overly complex pricing system for pharmaceuticals. Pharmacy intermediaries, known as pharmacy benefit managers (or PBMs), play a large role in perpetuating this overly-complex pricing system.

Much of the news coverage discussing rising pharmaceutical prices focuses on the list price. For most markets, this makes sense because the list price accurately portrays the typical transaction price. However, the list price for pharmaceuticals varies, often significantly, from the drug’s typical transaction price.

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Another Sneaky PBM Practice Needs to End

When the nation’s largest pharmacy benefit manager (PBM), Express-Scripts, and the insurance giant Anthem, Inc. sued each other last year over how much each company made in profits, the curtain was raised on the oversized role PBMs play in determining what consumers pay for their prescription drugs.

Hired to administer insurers’ prescription drugs plans, PBMs negotiate lower drug prices with pharmaceutical manufacturers and lower reimbursement rates with pharmacies, ostensibly to save money for employers and consumers. However, because PBMs operate without transparency, there is no way to know how much of the savings from lower prices are passed along to consumers.  This is why many of the largest corporations formed the Health Transformation Alliance to overhaul the way PBMs are paid and 28 states passed laws regulating some aspects of PBM operations. Additionally, Senator Ron Wyden (D-OR) recently introduced the “Creating Transparency to Have Drug Rebates Unlocked (C-THRU) Act” to require PBMs to disclose the amount and proportion of the rebates from drug manufacturers that are passed on to health plans.

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How U.S. Health Care Became Big Business

Health care is a trillion-dollar industry in America, but are we getting what we pay for? Dr. Elisabeth Rosenthal, a medical journalist who formerly worked as a medical doctor, warns that the existing system too often focuses on financial incentives over health or science.

“We’ve trusted a lot of our health care to for-profit businesses and it’s their job, frankly, to make profit,” Rosenthal says. “You can’t expect them to act like Mother Teresas.”

Rosenthal’s new book, An American Sickness, examines the deeply rooted problems of the existing health-care system and also offers suggestions for a way forward. She notes that under the current system, it’s far more lucrative to provide a lifetime of treatments than a cure.

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Pharmacists, customers nationwide coping with clawbacks

More than 80 million people in the U.S., many right here in Louisiana, are impacted by the focus of our Medical Waste investigation. And if you pay for United or Cigna health insurance, you’re in that number.

But even if you’re not, you could be overpaying for your medication.

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