How PBMs Are Hurting Patients and Communities
While local pharmacies have struggled with pharmacy benefit managers (PBMs) for decades, COVID-19 has laid bare the detrimental effects these largely unregulated middlemen also have on healthcare consumers.While local pharmacies have struggled with pharmacy benefit managers (PBMs) for decades, COVID-19 has laid bare the detrimental effects these largely unregulated middlemen also have on healthcare consumers. Utilizing anti-competitive and non-transparent practices, PBMs have reduced access and increased the price of healthcare for patients across Iowa.
PBMs determine which pharmacies will be included in a prescription drug plan's network and how much those pharmacies will be paid for their services. PBMs also regulate which drugs are covered under a specific plan and set copays, negotiate rebates with drug manufacturers, and incentivize patients to use mail order pharmacies operated by the PBM.
As an intermediary, the role of PBMs can go largely unnoticed, and the lack of transparency leads to hidden costs and higher drug prices. PBMs have been allowed to operate virtually unchecked, with three companies now controlling nearly 90% of all Americans' prescription drug insurance. While Express Scripts, one of the largest PBMs, reported gross profits of $8.76 billion in 2017, patients are paying more for their drugs and community pharmacies are struggling to keep their doors open.
In a two-year period, PBM payment reductions have resulted in the closure of over 70 community pharmacies in Iowa, and more have reduced hours of service. This includes most of the state's 24-hour pharmacies ceasing hours of operation overnight. The net effect of PBMs is a reduction in crucial access to healthcare providers.
IPA's Executive Vice President & CEO, Kate Gainer, stated, “This is a critical issue not only for Iowa pharmacists but for every Iowan who needs prescription medication. The continuing increase in market concentration and influence wielded by PBMs disadvantage pharmacies, consumers and health plan sponsors. IPA has been working for pharmacists to gain provider status and be paid fairly by PBMs, and we will continue to do so in the upcoming legislative session.”