When Scott Newman opened the Newman Family Pharmacy in Chesapeake in 2013, when he left Rite Aid, it was a new chapter in his career as a pharmacist.
But over the years, he said, industry changes began to put pressure on his business until he knew he had reached the end of the road.
“I had nowhere to go,” Newman said.
According to Newman, president of the Union of Pharmacists for Truth and Transparency, the driving force behind him going out of business was what he called “take it or leave it.”
“They have significantly reduced my repayments each year — up and down,” he said.
According to Newman, these entities are “intermediaries” between pharmaceutical companies and pharmacies created by pharmaceutical companies to assist in billing.
“Traditionally, the idea of PBM is a good idea,” he said.
However, according to Newman, it not only raises the price of rebates to pharmaceutical companies, but also promotes business to pharmacies under its umbrella, reducing competition and boosting pharmacy and patient costs.
After years of protests by independent pharmacists and customers, the Federal Trade Commission released a survey on PBM and how they affect drug prices on June 7.
“Many people haven’t heard of pharmacy benefit managers, but these powerful intermediaries have had a huge impact on the US prescription drug system,” FTC Chairman Lina Khan said in a statement. Said. “This study will shed light on the practices of these companies and their impact on pharmacies, payers, doctors and patients.”
The committee requests information and records from the six largest pharmacy benefit managers and evaluates relationships with insurance companies such as Caremark and Aetna owned by CVS Health, which also owns CVS pharmacies.
Cigna’s three largest benefit managers, Caremark, Express Scripts and Ascent Health Services. According to data released in April 2021 by the Drug Channels Institute, a pharmacy and distribution industry group, UnitedHealth-owned OptumRx accounted for more than 75% of the market share in 2020.
A PBM representative said he would respond to inquiries and refer to the PBM industry and lobby group Pharmaceutical Care Management Association for more information requests.
In an email statement, JC Scott, chairman and chief executive officer of the association, said the study will reduce prescription drug costs as benefit managers are “the only member of the prescription drug supply.” He said it shows that it is power. To reduce the cost of patients.
“Pharmaceutical pricing is the root cause of high drug costs,” Scott said. “The most effective study of consumer drug cost issues will be to investigate the entire supply chain. PBM will negotiate the lowest possible cost on behalf of consumers and the areas that consumers are demanding. By promoting and providing competition, we hold pharmaceutical companies accountable. “
A 2021 drug price report by the US House of Representatives Oversight and Reform Commission found that PBM is not the cause of rising insulin prices, but rather the rising costs of drug manufacturers.
Dr. Keith Hodges, R-Urvanna, gave up the last independent pharmacy in Gloucester last year. He said he sees pharmacy benefit managers as part of the problem of rising prices.
Hodges purchased the first pharmacy in West Point at the age of 25 in 1991. He has been a pharmacist for over 30 years.
“When you try to talk to the legislators about it, they glaze and they often say,’Leave it to the free market,'” he said. “Well, it’s not a free market because it’s out of the control of the patient. If the patient can manage premiums, copayments, etc. and has no bargaining power or bargaining power with the pharmacy because of a blind contract, it’s a free market. is.”
According to Hodges, one of the challenges in dealing with PBM in Virginia is the Federal Employee Retirement Income Security Act. However, Rutledgev, a Supreme Court decision from December 2020. PharmaceuticalCare Management Assn. Allowed Arkansas law to regulate PBM refunds to pharmacies and acknowledged that it is consistent with ERISA.
Hodges said the decision is convening a workgroup to see how it opens the door to Virginia’s regulations for third-party managers in the PBM and other healthcare fields.
“The problem is that the state is limited in what it can do until it can actually find a way to deal with it under ERISA law,” Hodges said.
Another issue with PBM is spread pricing. This was discovered while reviewing the explanation of the benefits of one patient at Gloucester Pharmacy.
“The patient is paying $ 10 because the plan has shown that he is charging $ 30 to the plan sponsor, but the plan is charging $ 30 to the plan sponsor, but they are only paying me $ 10. There was a $ 20 spread on the prescription because it wasn’t. “
And when he performed that kind of spread figure at his pharmacy, it was $ 38,000 a year from his Gloucester pharmacy alone.
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According to a report from the Virginia Department of Health Care Services submitted to the General Assembly in 2019, the total spread price for the 18 months to June 30, 2018 was $ 29 million. In Ohio, spreads brought $ 223.7 million to PBM, according to a 2018 report by the Ohio Medicaid Authority.
“The FTC actually needs to investigate this and peel off the layers to see what’s going on,” Hodges said.
Newman said the FTC investigation was “after a long time.”
“Most of us are plagued by people who produce nothing, have no legal oversight or regulation, distribute nothing, and house nothing but competing pharmacies. Entity working on their improvement on both sides of the chain, “he said.
Ian Munro, ian.munro @ virginiamedia.com, 757-861-3369, @iamIanMunro
