Pharmacy benefit managers wield significant influence over patient care, costs
Multiple Republican-led states have sued to rescind a federal rule keeping the records of those who sought legal reproductive care private, while a federal judge in Texas is questioning the constitutionality of the federal HIPAA law in its entirety. (Photo by)
As a physician, I have witnessed firsthand the inefficiencies in our health care system that make it harder for patients to access the care they need. One of these complexities patients now have to navigate is a growing industry of insurance middlemen known as pharmacy benefit managers (PBMs), whose practices meddling in our local health system increase health care costs and block access to critical medications.
PBMs work between health insurance companies and drug manufacturers to negotiate lower drug prices for the health plans they represent. Their function and influence in the health care industry have evolved significantly, and today, PBMs operate with very little oversight or transparency and their decisions are often based on what is most profitable for a health plan rather than what is best for a patient.
PBMs wield significant influence over what treatments patients can access and how much they will be required to pay. These middlemen receive significant rebates and discounts from pharmaceutical manufacturers for the cost of medications and treatments after negotiations, but they don't pass those savings on to patients receiving the care, increasing what patients are required to pay out of pocket when they pick up their medication at the pharmacy counter.
PBMs can also require only certain drugs be covered by a health plan, impose arbitrary rules around access to provider-prescribed medications, and PBM revenue is often directly linked to the list price of a medicine, so PBMs are incentivized to recommend treatments that would yield the most profit.
The three largest PBMs – CVS Caremark, Express Scripts and OptumRx – manage nearly 80% of prescription drug claims for 270 million people across the country. To make matters worse, PBMs are increasingly integrating and consolidating with other health care services, including distributors and pharmacies, making the influence PBMs hold over the health care system even larger. As these for-profit entities merge and collaborate, it's unclear if the system is actually functioning in the best interest of patients regarding quality and cost of care.
PBMs have flown under the radar for far too long, but scrutiny of these middlemen and their impact on our health care system has rightfully grown in recent years, with many federal and state policymakers and regulators calling attention to the outsized role PBMs play in driving up health care costs. The Federal Trade Commission (FTC) found that PBM integration with chain pharmacies and insurers has allowed them to dominate the broader health system and that PBMs have significant control over what drugs are available to patients and how much they are required to pay.
The FTC even filed suit against the three of the nation's largest PBMs, citing their anticompetitive tactics as a barrier to health care access. In addition, numerous investigations found that PBMs often act in their own financial interest, including pushing patients toward drugs with higher out-of-pocket costs because it's more profitable for the PBM.
Access to consistent treatments is necessary for Louisiana patients, particularly those living with chronic health conditions or hard-to-treat illnesses such as cancer. Each year, more than 25,000 Louisianans receive a new cancer diagnosis. Alleviating access and financial barriers to care is a necessary step to improving health outcomes for patients.
It is overwhelmingly clear that we must take action to reform PBM practices to improve access to care for patients and stop letting middlemen meddle in our health system. There has never been a time when we can do more for patients as doctors, but at the same time, there has never been a time when we have more complexities in the health care systems impede healthcare access and affordability. This 'profit over patients' business model is putting critical care out of reach for many Louisiana patients. Time is overdue to curb harmful PBM practices.
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