How Do PBM-Owned Specialty Pharmacies Threaten Independents?

Jesse C. Dresser, JD, Partner, Frier & Levitt, LLC, speaks about pharmacy benefit manager-owned specialty pharmacies and how they can impact independent specialty pharmacies.

Transcript: PBM-owned specialty pharmacies is a very unique area within the health care space. So PBMs control not just the network, but then they’re also competitors within that network. So, they have every desire and every opportunity to want to push as much business as they can to their wholly owned specialty pharmacy, and they do that in a couple different ways. One of the ways they accomplish that is by selling it out to plans to their clients and saying, ‘I’ll give you a discount if you use our specialty pharmacy exclusively.’ Or they may just refuse to contract with them all together unless they use their in-house specialty pharmacy. With that design, they’re able to create a network that just has their own wholly owned specialty pharmacy as the only specialty pharmacy in the network. They can either do it that way, or create very very high terms and conditions for entry that basically are artificial barriers of entry to independent pharmacies looking to come into those networks. The final way that we’ve really seen, and this has come up in the past couple months, is this concept of patient trolling or prescription slamming, where the PBMs will, as soon as the claim is submitted for a specialty claim, will reject and say prior authorization is required. While the independent specialty pharmacy’s out there trying to get the prior authorization, they’ll begin reaching out to the patient, or reaching out to the prescriber, or sometimes even just shipping the medication direct to the patient without notifying the doctor, without notifying the patient, or the pharmacy that has done all the leg work up until this point to start to fill the prescription. So that’s the main ways that we’ve seen the PBMs really use their vertical integration, their leverage, to compete unfairly and drive business to their wholly owned specialty pharmacies.