Latest news with #PBMs
Canada News.Net
a day ago
- Business
- Canada News.Net
Weight-loss drug prices prompt rethink of US health benefits
NEW YORK CITY, New York: Rising spending on weight-loss and specialty drugs is prompting a majority of large U.S. employers to scale back health benefits in 2026, as budgets come under pressure, a new Mercer survey released on July 16 shows. Among companies with 500 or more employees, 51 percent said they plan to increase cost-sharing for workers in 2026 — such as by raising deductibles or out-of-pocket maximums — up from 45 percent who plan similar increases in 2025. Soaring costs of GLP-1 weight-loss drugs, such as Wegovy, are at the heart of employer concerns. According to Mercer, 77 percent of employers now rank Wegovy as a top cost concern. "More clients are saying ... 'I don't know how much longer we can sustain covering these medications,'" said Alysha Fluno, a pharmacy innovation leader at Mercer. While some companies initially offered coverage for GLP-1 drugs in hopes of lowering long-term health costs tied to obesity, surging prices are causing second thoughts. "Some employers facing big cost increases in 2026 may feel this coverage is out of reach," Fluno said. Competition from new drugs in the coming years may give pharmacy benefit managers (PBMs) more leverage to negotiate lower prices. The current GLP-1 drugs list costs over US$1,000 per month, though many insured patients pay less. The Mercer report says prescription drug costs jumped eight percent last year, and overall health benefit costs are expected to rise 5.8 percent in 2025. Employers are also rethinking their relationships with PBMs — middlemen between drugmakers and insurers — amid concerns over transparency and pricing practices. Thirty-four percent are considering switching PBMs, and 40 percent are exploring alternative drug pricing models. The scrutiny follows regulatory criticism of major PBMs like CVS Caremark, Express Scripts, and Optum Rx for steering patients toward high-cost drugs — a claim the industry denies. This week, CalPERS, one of the nation's largest public healthcare purchasers, announced it would switch PBMs in 2026, citing the need for better oversight and transparency.
CBS News
5 days ago
- Business
- CBS News
Sacramento's Ten Acres Pharmacy to close its doors after 5 years
Sacramento's Ten Acres Pharmacy announced that it is closing its doors after five years. This comes after big-box stores shut down hundreds of locations across the nation. "I am a pharmacist. That is what I do," said Sonya Frausto, who owns Ten Acres Pharmacy in the Curtis Park/Land Park area. "Knowing that I can't take care of them anymore because of something that is not in my control is the worst of this whole decision." Frausto said poor reimbursements from Pharmacy Benefit Managers, or PBMs, are to blame, and it's driving neighborhood pharmacies like hers out of business. "This is a critical service in the community, and it's so sad to see it go away," said Mary Odbert, who came by the pharmacy to tell Frausto she was sorry. Frausto said she started paying anywhere from 3 to 25 percent more for drugs, but insurance companies continued to pay her the same amount. "We're looking at a future where there are going to be fewer and fewer brick and mortar pharmacies in people's neighborhoods," said democratic state senator Scott Wiener from San Francisco. Weiner introduced a bill that would create a consistent rate across PBM reimbursements and prevent PBMs from pushing patients to use mail order. "Health care should never be about money," said Frausto. "It should always be about care." Frausto said this change could have saved her pharmacy had a similar bill passed last year. Wiener told CBS13 that the bill is already gaining bipartisan support and believes the governor is backing it now, too. "This year we've actually been working with the governor and put a piece of the bill into the budget," said Wiener. Frausto said what she is going to miss most about the pharmacy is the people they serve. She said the final day of Ten Acres will be August 20. "We see women who are pregnant and now their babies are five years old," said Frausto. "The reality is that I am going to miss taking care of people."
Forbes
10-07-2025
- Business
- Forbes
The Culprit Impeding Drug Competition Is Not Who The Feds Expected
"There's little point in pouring hundreds of millions of dollars into creating a biosimilar if PBMs ... More will refuse to cover it," writes Pipes." The Federal Trade Commission and U.S. Department of Justice recently kicked off a series of listening sessions to examine barriers to competition in the drug industry. The title of the first session—"Anticompetitive Conduct by Pharmaceutical Companies"—made it seem that regulators would chiefly investigate biotech firms. Yet by the end, panelists had refocused the spotlight onto pharmacy benefit managers—and provided striking evidence that PBMs, not biotech companies, deserve most of the blame for the anticompetitive practices that lead to high drug prices. If the FTC and DOJ heed the panelists' warnings and crack down on this misbehavior, it could tangibly reduce drug costs for patients. PBMs decide which medicines are included on insurers' formularies, or lists of covered drugs. That gatekeeping authority gives PBMs the power to negotiate prices with manufacturers and secure rebates. PBMs claim to use those rebates to reduce costs for patients. But the rebate structure actually gives them a strong incentive to prefer higher-priced drugs—even when cheaper and equally effective alternatives are available. That's because their earnings are generally determined as a percentage of a drug's list price. A 2024 House Oversight Committee report identified more than 1,000 instances in which PBMs favored higher-cost medicines over less expensive equivalents. In 300 of those examples, PBMs' preferred medicines cost patients at least $500 more than an alternative they excluded from their formularies. Formulary decisions like these lead to larger rebates and fees for PBMs—while the costs pile up for patients. According to a 2023 analysis, PBMs collect more than 40 cents of every dollar spent on brand-name medicines by commercial health plans. PBMs' perverse incentives go beyond the financial. As the FTC's and DOJ's panelists explained, PBMs' behavior stifles competition and innovation in the drug industry by crushing the development of generic and biosimilar drugs. Biosimilars, which are clinically similar versions of existing "biologic" drugs grown from living cell cultures, typically debut at prices that are more than 40% lower than the brand-name version's launch price. In some cases, biosimilars launch at prices that are 81% lower. But even after a year on the market, the average biosimilar commands just under 20% market share for its therapeutic line. PBMs frequently exclude these lower-cost—and thus lower-rebate—biosimilars from formularies or lock them behind prior authorization and "fail-first" requirements. In cases when PBMs do include biosimilars in their formularies, they're often artificially pricey "private-label" drugs affiliated with the PBMs themselves. Juliana Reed, the executive director of the nonprofit Biosimilars Forum, highlighted a particularly egregious example involving the blockbuster autoimmune drug Humira, which has 10 biosimilar competitors—that collectively account for less than 10% of U.S. market share. As James Gelfand—president and CEO of the ERISA Industry Committee, an organization representing large employer health plans—stated, "[t]his manipulation undercuts biosimilar sustainability." It dramatically limits biosimilar manufacturers' ability to establish themselves in the market and earn a return on their products. In fact, it's creating what the FTC and DOJ panelists termed a "biosimilar void"—a dramatic collapse in new biosimilar development. According to a recent IQVIA study, 118 biologic drugs will lose patent protection in the next decade. But biotech companies are currently developing biosimilar competitors for just 12 of them. There's little point in pouring hundreds of millions of dollars into creating a biosimilar if PBMs will refuse to cover it. Manufacturers of traditional chemically synthesized generic drugs face many of the same hurdles. The House Oversight Committee report found that "[n]ew generic drugs are experiencing historically slow adoption by patients directly resulting from PBM coverage decisions." The FTC and DOJ may not have recognized just how severely PBMs have undermined competition across the drug market. But it's not too late to solve the problem. The three largest PBMs—Caremark, Express Scripts, and OptumRx—are each integrated with a major pharmacy and together control nearly 80% of U.S. prescriptions. The nation's six largest PBMs account for almost 95% of all prescriptions dispensed. If any industry deserves to face antitrust scrutiny, it's this one. Putting a stop to PBMs' anticompetitive practices would be far more fruitful than imposing new price controls or other regulations on manufacturers. Policymakers should also consider requiring PBMs to pass negotiated rebates directly to patients, so beneficiaries see real savings at the pharmacy counter. The recent listening session has given our leaders an actionable path to reform of the market for prescription drugs. Fix PBMs, and concerns about drug prices will resolve themselves.
Yahoo
01-07-2025
- Business
- Yahoo
Gov. DeWine vetoes measure that would have been ‘suicide' for Ohio pharmacies
(Stock photo) Ohio pharmacists were worried that a measure inserted into the state budget would cause mass closures. Gov. Mike DeWine on Monday vetoed it, saying that lawmakers in the Ohio House and Senate asked him to. In his veto message, DeWine acknowledged that Ohio pharmacies are closing rapidly, and said he and Lt. Gov. Jim Tressel will keep working on the problem. Last year, Ohio lost 215 pharmacies and the total number dropped below 2,000 for the first time in memory, according to an online tracker launched by the Ohio Board of Pharmacy. Pharmacy owners have long complained that huge pharmacy middlemen with conflicted interests have used a non-transparent system to underpay them and drive them out of business. In response, legislation was introduced in the Ohio House earlier this year that would require the middlemen to reimburse pharmacies for drugs based on a public database compiled by the federal government. That would only allow pharmacies to break even on drugs. So the legislation also required the middlemen to pay a $10 per-prescription dispensing fee to cover pharmacies' overhead such as payroll, rent, taxes, and insurance. It's based on a statewide survey regularly conducted among pharmacies. Then the Ohio Chamber of Commerce got involved, telling state senators that the dispensing fees were a tax and that they should oppose them. The chamber made that claim even though the Ohio Department of Medicaid in 2022 adopted a similar system and saved $140 million in the process. Despite requests, the Ohio Chamber hasn't disclosed how much money it gets from the middlemen, known as pharmacy benefit managers, or PBMs. The company that owns the biggest PBM, CVS Health, was a 'presenting sponsor' of the Chamber's 2024 Healthcare Summit, and an executive with the company delivered a keynote speech. The Ohio Senate attempted a compromise between the House legislation and the Ohio Chamber's demand for no dispensing fees. It would have required PBMs to reimburse pharmacies in a transparent system, but it would have eliminated minimum dispensing fees. The Ohio Pharmacists Association said that would be much worse for pharmacies than the current, inadequate setup. Pharmacies could only break even on their drugs, and they couldn't recoup their overhead, they said. 'It's any pharmacist's suicide bill,' Dave Burke, the organization's executive director, said last week. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX In vetoing it, DeWine agreed. 'This item was intended to strike a compromise between interested parties on how to best regulate the practice of pharmacy benefit managers in Ohio and the requirements for fair and transparent reimbursement for Ohio pharmacies,' the governor's veto message said. 'However, due to drafting errors, the language will not achieve the legislative intent of providing the needed oversight of pharmacy benefit manager practices. Subsequently, the language as written, may result in further detriment to Ohio pharmacies, especially those in small, rural communities, and could result in a reduction in health care access for many Ohioans.' The message explained that those who wrote the legislation into the state budget asked that it be pulled back. 'Due to the errors in drafting final language, the Ohio House of Representatives and Ohio Senate have requested this veto,' DeWine's veto message said. 'Therefore, a veto of this item is in the public interest.' In an interview Tuesday, Burke said he didn't think there was any ill intent on the part his former colleagues in the Ohio Senate. 'I think people are getting misinformation from the PBMs, who are trying to maintain their foothold and prevent a free and transparent market,' he said. Burke also said he didn't believe the Ohio Chamber was selling out its Ohio membership in favor of out-of-state, Fortune 15 health conglomerates that own the big-three PBMs. 'I don't think the Ohio Chamber is anti-pharmacy,' said Burke, who is himself a pharmacist. 'I think they just don't understand how their benefits are actually being administered.' But he added that every business in Ohio has an interest in a healthy network of pharmacies. 'I don't know what they're going to do when their employees can't get their prescription drugs where they live,' Burke said. 'That's happening now in real time. We have pharmacy deserts and they're getting worse every year.' Denise Conway, who in 2019 restored pharmacy services in Danville, said the veto is far from enough to solve the problems besetting Ohio pharmacies. 'It is a slight win for pharmacies across Ohio and I am grateful for the governor's vision to see that things aren't being addressed,' she said in a text message Tuesday. In his veto message, DeWine said more needs to be done. 'It is important to note that the DeWine-Tressel Administration is committed to further reforms of pharmacy benefit managers, as already demonstrated in improvements made in Ohio's Medicaid program through the adoption of the Single Pharmacy Benefit Manager,' it said, referring to the measure that saved taxpayers $140 million. 'This administration is committed to working with the Ohio General Assembly in the future to deliver a pharmacy-benefit-manager regulatory bill.' Burke said that he might be partly to blame for the PBM-aligned position taken by the Ohio Chamber. 'I have to think, knowing (Senior Vice President) Rick Carfagna and (President and CEO) Steve Stivers, that they're not ignorant and they're not bought and paid for,' Burke said. 'They're intelligent people. Maybe it's my fault for not stopping by and sitting down with them.' He added that he's ready to work with the Ohio Chamber or anybody else to shore up Ohio's dwindling network of pharmacies. 'We're in a bad place,' Burke said. The Ohio Pharmacists Association 'definitely has an open hand and an open mind for anyone who's willing to work with us on this issue. But we are running out of time.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
Politico
01-07-2025
- Business
- Politico
State PBM regulation hits a SCOTUS roadblock
Programming note: We'll be off this Friday but will be back in your inboxes next Monday. Driving the Day STATES DEALT A PBM BLOW — The Supreme Court declined Monday to consider an appellate court's 2023 decision overturning portions of an Oklahoma law regulating pharmacy benefit managers, raising questions about the implications for state actions to rein in the companies' business practices. The 10th Circuit appeals court ruled that federal laws regulating private employer-sponsored health plans and Medicare's drug benefit preempt the 2019 state law's provisions that aimed to bolster independent pharmacies' bargaining power with PBMs, which help negotiate retail drug prices between drugmakers and payers. Community pharmacies have long panned the middlemen — which are responsible for 80 percent of the market — for steering customers toward pharmacy chains they own. Nearly three dozen states and Washington, D.C., plus several pharmacy organizations, joined the case as 'friends of the court' on the side of Oklahoma, illustrating state-level interest in overseeing how PBM practices affect where patients pick up their prescriptions. Several states have considered PBM bills in recent years as congressional efforts to police the industry have floundered. Reaction: 'We are disappointed, but hopeful that the Court will take up this issue in the near future and clarify that States can indeed regulate PBMs in the way envisioned by Oklahoma's laws in question,' Leslie Berger, a spokesperson for Oklahoma Attorney General Gentner Drummond, said in a statement. B. Douglas Hoey, CEO of the National Community Pharmacists Association, said the group is 'very disappointed' the Supreme Court didn't act to 'reinforce' a unanimous 2020 decision upholding Arkansas' regulation of PBM reimbursement practices — a ruling widely seen as giving states more leeway to act amid Congress' silence. 'Now the lower courts are divided, and the states are confused about what they can do to protect patients and small-business pharmacies from the unfair, anticompetitive practices of the PBMs, higher drug costs and from PBMs overruling doctors' prescribing decisions,' he said. PBMs celebrate: The PBMs' lobbying group, which challenged Oklahoma's law, applauded the high court's denial of Mulready v. Pharmaceutical Care Management Association and suggested it portends a similar fate for similar laws in other states. 'In recent months, various businesses and unions have joined to challenge state restrictions on health benefit in Iowa, Minnesota, Arkansas, and Tennessee,' PCMA general counsel Jack Linehan said in a statement. 'These cases and the Mulready decision send a powerful reminder that overbroad state laws are not only illegal, but they boost healthcare costs for businesses and their workers.' NCPA said the 10th Circuit's decision likely stands for now, but only for the six states covered by that court. 'States contemplating PBM reform should not be dissuaded,' it said. PBMs have taken Arkansas back to court — this time over a new law that would prevent them from owning pharmacies like CVS in the state. IT'S TUESDAY. WELCOME BACK TO PRESCRIPTION PULSE. No more excess humidity in D.C. would be great. Send tips to David Lim (dlim@ @davidalim or davidalim.49 on Signal) and Lauren Gardner (lgardner@ @Gardner_LM or gardnerlm.01 on Signal). In the courts MORE DENIALS — Federal courts have rebuffed two attempts by anti-vaccine activists to challenge past losses. The Supreme Court also denied on Monday a bid by Children's Health Defense — the group founded by Health Secretary Robert F. Kennedy Jr. — to have its censorship case against social media giant Meta heard. The group alleged that the owner of Facebook and Instagram colluded with the federal government to deplatform its content. And the U.S. Court of Federal Claims denied CHD attorney Rolf Hazlehurst's motion to reopen his son's case claiming that childhood vaccines caused his autism. Judge Edward H. Meyers signed the order Thursday, according to the court docket, but the document is not yet public due to court rules that embargo the release of decisions until parties decide whether to request the redaction of any medical or otherwise private information. Mary Holland, CHD's president and CEO, said the group is disappointed by both decisions. 'It is our understanding that Mr. Hazlehurst is already evaluating the next steps,' she said in a statement. Separately, she said 'the problem' the organization presented in its Meta case 'has lessened' — seemingly a nod to Kennedy's ascension to power within the federal government. 'The censorship-industrial complex agreements of the past seem to have gone by the wayside, at least for now, and for that I am grateful,' she said. In Congress A BBB ORPHAN DRUG WIN? Drugmakers notched a win in the GOP megabill Monday, David writes. Senate Parliamentarian Elizabeth MacDonough allowed an expansion of Medicare's drug-price negotiation exemption for orphan drugs to include medicines that treat multiple rare diseases to remain in the package. She initially ruled that it violated the so-called Byrd rule — which limits what can pass with a simple majority during the reconciliation process — over the weekend. The decision means the policy remains in the underlying GOP reconciliation package being debated by the Senate. Pharma Moves Parexel, a clinical trial consulting company, has hired two FDA alums — Dr. Lola Fashoyin-Aje as senior vice president and head of regulatory oncology, cell and gene therapies and Tala Fakhouri as vice president of consulting for artificial intelligence and digital policy. Fashoyin-Aje was director of the Office of Clinical Evaluation within the FDA's Center for Biologics Evaluation and Research, while Fakhouri was associate director for data science and AI in the Office of Medical Policy at the FDA's Center for Drug Evaluation and Research. Anindita 'Annie' Saha will take on the lead AI policy role at the FDA's drug division, according to an internal email reviewed by POLITICO. Saha is a 20-year agency veteran who will also keep her role as associate director for strategic initiatives at the Digital Health Center of Excellence within the FDA's device center. Saha replaces Fakhouri. Shara Selonick has joined the Senior Care Pharmacy Coalition, which advocates for long-term care pharmacies, as vice president of strategy and government affairs. She most recently was a public health adviser at the FDA. Document Drawer The Government Accountability Office published a report on its forum on 'reducing spending and enhancing value in the U.S. health care system. AbbVie is scheduled to meet with the White House Office of Information and Regulatory Affairs on Tuesday to discuss the Health Resources and Services Administration's 340B rebate guidance. AHIP is scheduled to meet with OIRA on Wednesday to discuss the policy. WHAT WE'RE READING The Supreme Court's decision upholding the Affordable Care Act's coverage mandate for preventive services may now shift the legal landscape toward defining what constitutes 'evidence' underpinning federal recommendations, Lauren writes. Kennedy's influence over federal health regulation under a Republican president is being seen in a once-unlikely area — psychedelics as sanctioned mental health treatments, POLITICO's Erin Schumaker reports. A federal judge ruled last week that the Health Resources and Services Administration didn't violate the law by requiring Johnson & Johnson to get its approval before changing how it reimburses providers participating in a drug discount program, Stat's Ed Silverman writes.
