Is PBM Reform Nearing the Finish Line?

Cassity,Anne;

News

Media

Conferences

Publications

Clinical

Events

Resources

Publication

Article

October 15, 2024

Pharmacy Times

October 2024

Volume90

Issue 10

Is PBM Reform Nearing the Finish Line?

Author(s):

Anne Cassity

Key Takeaways

Independent pharmacies and NCPA are pushing for PBM reform to address unfair practices affecting drug costs and pharmacy viability.
Key legislative efforts focus on Medicaid and Medicare, aiming for fair reimbursement and transparency in pharmacy payments.
The NCPA is mobilizing pharmacists and patients to pressure Congress for PBM reform, highlighting the impact on drug costs and access.
Regulatory bodies like the FTC and CMS are investigating PBM practices, underscoring the need for oversight and enforcement.

Legislative efforts in the states and Washington, DC, have made progress, but there is still a way to go.

For the past 15 years or so, independent pharmacy has been pushing consistently for transparency into the business practices of pharmacy benefit managers (PBMs) and reforms to their tactics. Patient steering, spread pricing, take-it-or-leave-it contracts, formulary manipulations, low or below-cost reimbursements, and other schemes have put tremendous pressure on independent pharmacies and patients seeking affordable, accessible care.

Bright mid-day view of the traditional neoclassical architecture of the Capitol Building’s dome, columns, and steps in Washington DC, USA - Image credit: lazyllama | stock.adobe.com

Image credit: lazyllama | stock.adobe.com

When it comes to finalizing reforms, we find ourselves at fourth-and-1. With the help of independent pharmacy team members, patients, and other allies, the ball has been moving ever closer to the goal line in Washington, DC.

Legislatively, the National Community Pharmacists Association (NCPA) is pushing Congress to advance bills that would change the pharmacy payment model starting with Medicaid and Medicare, which together represent more than 50% of the average independent pharmacy’s business. NCPA is specifically prioritizing passage of the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act (S 3430), which includes provisions that require the Centers for Medicare & Medicaid Services (CMS) to define reasonable and relevant contract terms in Medicare.1 NCPA is also prioritizing the Modernizing and Ensuring PBM Accountability Act (S 2973)/Lower Costs, More Transparency Act (HR 5378), which would ban spread pricing in Medicaid managed care by requiring fair and transparent reimbursement to pharmacies^.1,2There has been movement on these bills in the House and the Senate, but the goal line has yet to be crossed.

About the Author

Anne Cassity is senior vice president of government affairs at the National Community Pharmacists Association.

In April, hundreds of pharmacists from 40 states went to Washington for the NCPA Congressional Pharmacy Fly-In to keep the pressure on. They visited more than 250 offices on Capitol Hill for meetings with members of Congress or staffers, an outreach effort that is continuing with NCPA’s Months of Action campaign. This initiative is aimed at getting members of Congress or their staff to visit independent pharmacies in August or October.³ Community pharmacies hosted more than 30 of these visits in August, with half the visits coming from leadership offices or members of key committees of jurisdiction. Whether in the halls of Congress or in a local pharmacy, these meetings are opportunities to build lasting relationships and demonstrate firsthand the role of pharmacies in their communities, what is at stake if the local drugstore must shut its doors, and why PBM payment reform is needed now.

And a lot is at stake. Every day from May 2023 to May 2024, more than 1 independent pharmacy closed for good. This is a tragic trend that seems to be continuing, and it could be catastrophic. Vulnerable populations in rural or underserved areas especially will suffer, as there may not be other health care providers to turn to.

This fall, the best chance for PBM reform will be for Congress to include it in a larger, year-end legislative package. NCPA is keeping this issue at the forefront by enlisting community pharmacists to call or email their legislators to urge them to immediately act on PBM reform, and we are getting patients involved too. More than 38,000 patients have sent letters to Congress since mid-June, and NCPA is working to get even more.⁴

In policymakers’ minds, the patients’ perspective helps to underscore the pharmacists’ experiences. A public poll conducted by NCPA revealed widespread concern over prescription drug costs and PBMs. Specifically, 84% of respondents agreed that prescription drug costs are too high, 73% were concerned about PBMs’ impact on drug pricing, and 68% agreed that PBMs are driving up drug costs. Patients may not know the intricacies of PBMs’ practices, but more than 60% supported Congress having some oversight into PBM practices to ensure fair pricing and transparency.⁵

Legislation is just one part of these efforts, however. Another is enforcement. Regulators must keep a close eye on PBMs and address contract abuses when they occur. CMS not only has an obligation to enforce applicable laws, it also has clear authority to establish guidelines on the assessment or calculation of reimbursement rates and mandate that reimbursements be “reasonable.”

The Federal Trade Commission (FTC) and the Department of Justice are also showing interest in the practices of PBMs. It has been a little over 2 years since the FTC voted unanimously to move forward with a 6(b) study to dive deep into PBMs. The FTC issued an interim report in July that explicitly stated that the massive middlemen are creating unfair advantages for themselves that are driving up costs for consumers, limiting consumer choices, and killing access to quality pharmacy care.⁶ Most recently, on September 20, the FTC sued Express Scripts, Caremark, Optum, and their affiliated group purchasing organizations over alleged unfair rebating practices related to insulin drugs.⁷

Soon after the FTC’s report, the US House Committee on Oversight and Reform issued its own report, after holding multiple hearings regarding PBM practices. Among the findings was that the 3 largest PBMs “have used their position as middlemen and integration with health insurers, pharmacies, providers, and recently, manufacturers, to enact anticompetitive policies and protect their bottom line.”⁸ Movement has occurred here too, but this goal line also remains to be crossed.

Policies compelling changes to how the PBMs operate are close. Congress just needs to finish its job, and then regulators must enforce what’s on the books. We’re at fourth-and-1, and we’re going for it.