MD Attending Physician
10+ Year Member
Sep 12, 2010
Attending Physician
Often there are posts about high drug costs with references made to Pharmacy Benefit Managers (PBMs). I just received a newsletter authored by Daniel A. Hussar, PhD, wherein he describes details about PBMs that I think you all would find informative. Dr. Hussar was my Pharmacy Lab instructor when he was pursuing his Master's Degree, and we have maintained a friendship for well over 50 years.

Details of his career and accomplishments are availableat this site for those who are interested: https://www.usciences.edu/news/2017/daniel-a-hu....

What follows is a portion of his editorial to Pharmacists and students:

Reducing Drug Costs – PBMs are Not Needed and Should Not be Used!

Some may believe that pharmacy benefit managers (PBMs) initially had a useful role in increasing the utilization of generic medications and other less expensive therapeutic alternatives on their formularies for the purpose of reducing drug costs. However, the PBMs now must be viewed as a self-serving, highly-profitable industry that is partly responsible for the continuing increases in drug costs and, most importantly, creates barriers for patients and health professionals in attaining optimal and safe use of medications. Generic utilization rates now approach 90% in many programs/areas, and other competitive pressures also contribute to some containment of drug costs. Nevertheless, drug costs continue to rapidly increase as the PBMs, pharmaceutical companies, and health insurance companies accuse each other as being primarily responsible for the increased costs, while at the same time these industries generate greater profits for their companies.

All three of these industries are complicit in the situation that presently exists that is characterized by costs that are not sustainable. However, the PBMs warrant thorough investigation because they contribute nothing to the access, quality, or scope of health care for patients. Indeed, they impose restrictions and barriers on patients, pharmacists, and prescribers that compromise the attainment of treatment goals with prescription medications.

The Auditor General of Pennsylvania has been holding hearings across the state because of concerns brought to his attention regarding questionable/abusive practices of PBMs, the closing of a number of independent pharmacies, and the challenges faced by some patients in obtaining their medications. I was among the pharmacists who presented testimony at one of these hearings and much of the following information was considered at this hearing.
PBM practices/abuses
The practices/abuses inherent in many PBM prescription plans include, but are not limited to, the following:

• Some PBMs own their own pharmacies that patients are required to use or are provided financial incentives to do so.
• Denial of freedom of choice for patients to choose their pharmacy – Many pharmacies are excluded from participation in certain PBM programs. Even in situations in which they are included, financial incentives are often provided to patients to use the PBM's pharmacy or another pharmacy. This eliminates or reduces freedom of choice for patients in selecting the pharmacy they choose to use.
• Restrictive formularies – Decisions to include medications on a formulary, or to designate medications as having a preferred "tier" or status on a formulary are based only on cost considerations rather than therapeutic, clinical, or convenience considerations for patients. Recent examples include decisions to offer/recommend prescription plans to clients that exclude coverage for expensive medications used for the treatment of rare diseases.
• Prior authorization – This practice is based on cost considerations and prevents or delays prescribers from exercising independent decision-making authority on behalf of their patients.
• "Take it or leave it" contracts – Contracts are developed unilaterally by PBMs without pharmacist input, discussion, or possibility of negotiation.
• "Gag clauses" – Many PBM contracts include restrictions that prevent pharmacists from identifying less expensive alternatives for obtaining medications.
• Inequitable reimbursement/compensation for pharmacists
• "Claw-back" fees and Generic Effective Rate deductions – Imposition of fees and reductions of compensation following dispensing/adjudicating of prescriptions/claims are inequitable for pharmacists.
• No transparency – PBMs refuse to provide information, explanation, or justification regarding their financial arrangements with clients and pharmaceutical and health insurance companies by claiming that it is proprietary information.
• Rebates/discounts – PBMs obtain substantial rebates and discounts from pharmaceutical companies for many drugs but clients and patients do not necessarily share in or benefit from these reduced prices of drugs to the PBM.
Patients who participate in plans for which the cumulative costs of their prescription medications is a factor, are at a serious disadvantage if the list price, instead of the rebated/discounted actual cost, is used in calculating the cost of their medications.
• Patient communication – There is no opportunity for personal face-to-face communication between pharmacists and patients who have been required or incentivized to obtain their prescriptions from a mail-order pharmacy. Although patients may contact a PBM call center, one of the criteria on which call center staff are evaluated by some companies is the number of phone discussions completed in a certain period of time. In other words, the briefer the conversation, the better the evaluation.
• Waste – "Drug take-back days" have been conducted during the last several years and vast quantities (tons!) of medications have been turned in. I recommend that the appropriate government agency evaluate a representative sampling of these medications (with patient confidentiality being protected). I anticipate that a large and disproportionate quantity of the returned medications will be prescriptions from mail-order pharmacies that were not needed and not requested by patients.
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