Pharmacists: Drug benefit managers need more oversight
Letter to HHS secretary says transparency needed to cut costs
Pharmacy middlemen act in ‘virtual black box,’ letter says
Middlemen who manage drug benefits for employers and insurers should be under greater government oversight of their pricing and billing practices to make health care cheaper, an independent pharmacists’ group said.
President Donald Trump’s plans to lower prescription drug costs will only succeed if greater transparency is imposed on pharmacy benefit managers, the group said in a letter to Health and Human Services Secretary Tom Price that was released Monday. PBMs include CVS Health Corp., which also operates retail pharmacies, and Express Scripts Holding Co.
Benefit managers engage in price negotiations that are often kept secret for competitive reasons, with manufacturers on one end and pharmacies on the other. Pharmacists have criticized these discussions, as well as so-called clawbacks — co-pays for cheap, generic medicines that can exceed the price of the drug itself, sometimes creating extra profit for the PBM. Some middlemen prohibit pharmacies from telling customers about the clawbacks, and the practice has sparked at least 16 federal lawsuits.
PBMs “continue to operate in a virtual black box,” according to the letter dated Feb. 16. It was signed by Doug Hoey, Chief Executive Officer of the National Community Pharmacists Association.
PBM representatives say the industry works to keep price increases at a minimum, in part by pitting rival drugmakers against one another. The Pharmaceutical Care Management Association, a PBM trade group, has said it expects greater scrutiny over its role in the pricing of medicine and wants to make its case “vocally and effectively.”
Trump is promising to lower drug costs, saying the government should get better prices, and the pharmaceutical industry is “getting away with murder.” As the outcry over drug pricing intensifies, the middlemen have gained more attention.