Point of View: Middlemen profiteers driving up your prescription drug costs
Prescription drug costs are an urgent issue for many Oklahomans. But understanding why so many patients’ drug costs continue to rise isn’t as simple as you might think.
The real culprits are not any of the players we normally hear about. To understand why many patients drug bills are climbing even as net prices for branded drug prices fell in 2018, you need to understand the role of pharmacy benefit managers (PBMs).
If you’ve gone to a pharmacy for a new prescription only to learn you need a “prior authorization” or that your drug is “non-preferred” and requires a high copayment, you’ve run into a PBM. PBMs are a middleman between drug companies, insurance companies and pharmacies. But they operate with almost no oversight, using their unique position to inflate costs and undercut savings for patients to line their own pockets.
Last month, it was reported that one of the largest PBMs required doctors to provide a “documented clinical reason” to prescribe a cheaper version of the same drug.
Just three companies make up 85% of the overall PBM market, and together pocket more than $300 billion in revenue annually. And according to a new report, PBMs and other non-manufacturer stakeholders retain almost half of all spending on branded prescription drugs.
In commercial plans, the total money involved in these transactions is hidden from view. But one study of the top 90 drugs used by Medicaid managed-care plans found that when insurers spent $4.2 billion these medications, PMBs pocketed $1.3 billion.
PBMs are why it can cost more to use your insurance than to pay the cash price for certain drugs. They’re also why it’s been illegal in many states for pharmacists to tell their customers when they’d get a better price by not using their insurance — including here in Oklahoma.
Last year Oklahoma lawmakers voted unanimously to end this so-called “gag rule”, but PBMs have tied up the law in the courts. Neanwhile, PBMs continue to stand between patients and their medicines — sometimes with life-or-death implications.
Take PCSK9 inhibitors, a newer high-cholesterol drug class that dramatically reduces the risk of heart attack and stroke for patients who don't respond well to statins. Because of their higher price than generic statins, PBMs rejected PCSK9 prescription claims at astounding rates — up to 80%.
In 2018, manufacturers cut the price of the drugs by an astounding 60% to improve patient affordability.
But according to research from Avalere Healthcare, up to 70% of Oklahoman Medicare beneficiaries still face hundreds of dollars a month in out of pocket costs for the drugs in 2020.
PBMs have simply moved the drugs to Part Ds’ “non-preferred” brand tier, which can require even higher cost-sharing than the specialty tier — up to 50%, in fact.
This requires emergency attention: Those who are rejected or abandon their medication are up to 21% more likely to suffer a heart attack or stroke.
Medicare can and should step in and require Part D plans and their PBMs to offer PCSK9s at an affordable, fixed co-pay for the patients who need them, as Sen. James Lankford has called for.
It’s just one illustration why Oklahomans should demand more transparency, oversight and accountability for PBMs.
Billingsley is executive director of Oklahoma Pharmacists Association.