In the News | Sarah Huckabee Sanders: My State Is Taking On the Middlemen Who Inflate Drug Prices

The New York Times

Author: Arkansas Governor Sarah Huckabee Sanders

Behind inflated prescription prices, complicated insurance plans and dying local pharmacies, there is a little-known culprit: pharmacy benefit managers that operate as self-serving middlemen between drug manufacturers, insurance companies and you. Now my home state, Arkansas, is taking action against them.

I am proud to be the first governor to ban the anticompetitive practices that allow P.B.M.s to dominate the prescription drug market, and I encourage other states and Congress to follow Arkansas’s lead.

Pharmacy benefit managers started as a good idea that quickly went sour. They initially served as negotiators between pharmacies and insurance companies. P.B.M.s are supposed to keep track of fast-changing drug prices, insurance plans and government regulations, and are intended to keep patient costs low and prescriptions filled. But anyone who has had to pay an insurance premium or co-pay recently most likely knows they don’t always work as intended.

Instead, some of these P.B.M.s opened their own pharmacies and others were acquired by existing pharmacy chains, in both cases creating huge conflicts of interest. The result: P.B.M.s forcibly steer patients away from independent operators and inflate drug prices in the vacuum left behind. That consolidation has only hastened in recent years. Today the nation’s three largest pharmacy benefit managers process 80 percent of all prescriptions, and their affiliated pharmacies bring in 70 percent of all specialty drug revenue. They bring in steep profits, too: Pharmacies associated with the nation’s largest P.B.M.s received $1.6 billion in excess revenue from just two cancer drugs in under three years.

Especially in places like rural Arkansas, that puts patients at risk. I heard from one woman in Camden who was a longtime patron of  a community pharmacy where she always picked up her prescription in person.

.But when she developed a life-threatening breathing disorder that required an inhaler, she ran into problems with her health plan, which is administered by one of the largest pharmacy benefit managers in the country, CVS Caremark. When it came time for her routine refill, her claim was denied. She was told she had to use one of CVS’s pharmacies (which share a parent company with the P.B.M.), the closest of which was an hour and a half drive away.

She had three options: drive three hours round-trip, pay hundreds of dollars out-of-pocket at her trusted local pharmacy or risk enrolling in mail-order prescriptions.

She reluctantly chose mail order, which required jumping through various hoops, including a new doctor’s appointment and onerous paperwork, only to encounter delays that left her without an inhaler for weeks. After finally getting an inhaler, she went to refill the prescription and was told it was no longer covered for mail orders.

This red tape isn’t just annoying; it’s also life-threatening. And the only purpose it serves is to line the pockets of corporate suits who stand between patients and the care they need.

Arkansas is fixing this problem. The legislation I just signed makes it so that a P.B.M. cannot also own a pharmacy. Pharmacy benefit managers can still operate in our state; they just can’t continue to mistreat patients and box out other pharmacies.... CONTINUE READING