We’ve been here before, right? Congress and administration eager to talk about mysteriously rising prescription drug prices. For years, both agencies have tried to plug loopholes and demand greater transparency from pharmacy benefit managers (PBMs) — holding hearings and writing bipartisan legislation. Unfortunately, broader drug pricing reform remains elusive.
nearly 80% of adults Says the cost of prescription drugs is unreasonable. Drug prices remain high for many reasons, but one player stands out for incurring high costs without providing value to consumers – PBM.
PBMs are middlemen between pharmaceutical companies and consumers. Like most middlemen, PBMs prefer to operate without noticing. When confronted, however, they vehemently argue that they are invaluable to payers and consumers. They are notorious for price gouging, which affects not only patient wallets and access to prescription drugs, especially branded drugs.
integration cost
The top three pharmacy benefit managers — CVS Health’s Caremark, Cigna’s ExpressScripts, and UnitedHealthcare’s Optum — handle more than 77% of prescriptions Delivered to Americans. These PBMs are classic oligopolies, where a few companies dominate the market, capture disproportionate profits for themselves, provide marginal value to justify large expenses, and exert undue influence over the businesses that depend on their dominance of the market.
In the case of PBM, control over adjacent markets is more subtle. Each major PBM is at the center of a larger conglomerate that collectively dominates the health insurance, prescription drug insurance, retail, mail order, specialty and long-term care pharmacy markets, resulting in higher costs and limited access to consumers, And anticompetitive treatment in non-affiliated pharmacies. To make matters worse, these conglomerates have also become healthcare providers.
This anticompetitive behavior threatens independent or market-specific pharmacies, such as long-term care pharmacies, which have been shown to support patient health by improving medication adherence and adherence.
For example, a long-term care pharmacy, Senior Care Pharmacy Alliance Where I’m president, they share what happened to them when their pharmacy benefit managers arbitrarily raised the price of critical drugs they provided to patients. As a small business, they said they were forced to make an impossible decision: supply specific and much-needed prescription drugs at a loss, which could put them out of business or stop supplying essential drugs. They chose to protect their patients and are now trying to find a way to survive in a rigged game.
Prescription medications are critical to the quality of life of older adults requiring long-term care. They are medically complex, suffer from multiple chronic diseases, and have extensive impairments in daily activities. On average, they took 12-13 medications a day. Anticompetitive barriers imposed by oligopolies that limit patients’ access to high-quality care and services from specially trained healthcare professionals such as long-term care pharmacies should be eliminated.
What can be done?
as a start, Federal Trade Commission The (FTC) should investigate PBM and its affiliates, and should work with the Department of Health and Human Services to eliminate extortionate fees and abusive business practices that are detrimental to consumers and competition. The Centers for Medicare and Medicaid Services (CMS) should promote Prescription Drug Programs (PDPs) and PBMs to expand consumer access to LTC pharmacy services. It’s clear that behind the scenes, PBMs and their parent companies are extracting more and more excess profits from consumers and payers for the same services, while Americans struggle to cover basic needs.
The FTC’s solicitation for public comment on PBM practices is a good start, but there is much work to be done. The FTC must act on the information it receives. CMS must go further than its current proposal. Congress must thoroughly investigate the anticompetitive behavior of these conglomerates and act accordingly. Doing so will provide better outcomes for patients and a more competitive market for non-affiliated pharmacies. Free markets cannot last long in an oligopoly. If the government does not act, you can be sure that these business giants will continue their anti-competitive behavior.
Photo: gerenme, Getty Images
