A recent legislative hearing in Atlanta featured a stream of PBM critics.
South Georgia pharmacist Nikki Bryant said PBMs are putting her out of business. Cancer patient Katie Groover said they have “exhausting” bureaucratic processes that “take away patient choice.’’
Dr. Melissa Dillmon, a Rome oncologist, said PBMs often cause delays for patients trying to get the medicines they need.
And Dr. Jean Sumner, dean of Mercer University School of Medicine, accused PBMs of undermining rural health care in Georgia.
While these people and many others in the health care world know what a PBM is, most people don’t have a clue. Yet PBMs — more formally known as pharmacy benefit managers — play a big role in the prescription drug coverage of tens of millions of Americans.
“We’re all going to be hearing a lot more about them,” said state Rep. Eddie Lumsden, R-Armuchee, who chairs the House Insurance Committee that heard a PBM presentation last week.
PBMs are corporate entities that basically serve as middlemen between health insurers or large employers and drugmakers.
While they have their strong defenders among insurers and employers, criticism of PBMs has grown in recent years. Their detractors say they often act against the interests of consumers and some sectors of the health care economy.
Government scrutiny of these groups is also mounting. Georgia and other states are looking at doing something about how PBMs operate, and so is the U.S. Congress.
These benefit management groups make decisions on which medications will be placed on an insurer’s list of covered drugs, and how much the insurer will pay for them. The pricing often includes rebates paid by the drug manufacturer to the PBM, but that rebate isn’t passed on to the patient.
Bryant, Groover, Dillmon and Sumner — the four critics mentioned earlier — traveled to the state Capitol last month to testify about their problems with PBMs at a hearing of the House Special Committee on Access to Quality Health Care.
The Georgia General Assembly has passed laws to curb PBM practices in recent years.
And once again this session, lawmakers aim to chip away at what Rep. Matt Hatchett, a Dublin Republican, calls the “repugnant’’ practices of these businesses.
A Monday legislative hearing showed the divisiveness surrounding the issue.
A PBM industry trade group told the Senate Insurance and Labor Committee that a pending Senate anti-PBM bill is “a windfall” for pharmacies and drug companies. A Georgia Pharmacy Association official countered that PBMs pursue “self-dealing on the grandest scale.”
Three large PBMs — CVS Caremark, Express Scripts, and UnitedHealth’s Optum — control about 80% of that market.
There’s little doubt that PBMs are profitable. Recently, giant insurer Anthem reported that its 2019 revenue grew 12.9% year over year, to $103 billion, thanks in part to the successful launch of the insurer’s pharmacy unit, IngenioRx, according to a FierceHealthcare article.
But PBM methods can be opaque, even to health care experts.
The system is “not transparent to employees or beneficiaries,’’ said Bill Custer, a health insurance expert at Georgia State University.
“PBMs have grown in power and profitability, partly because of the share of pharmaceutical (spending) in health care’’ has risen, he said.
A group representing PBMs, the Pharmaceutical Care Management Association, says the benefit managers “are the advocates for consumers and health plans in the fight to keep prescription drugs accessible and affordable.”
Custer says that some entity is needed to negotiate for the consumer with pharmaceutical companies. “Someone has to monitor prescriptions so the appropriate drug is prescribed,’’ he adds.
And a health insurance trade organization points to drug manufacturers, not PBMs, as the main culprits on prescription price increases.
“When Big Pharma blocks competition and maintains monopolies on medicines, they can set any price they want. That’s price gouging,’’ said Kristine Grow of America’s Health Insurance Plans.
‘Steering’ angers consumers
The practice of forcing a patient to use a PBM-affiliated pharmacy has angered Georgia lawmakers and spurred many of them to push for action.
Last year, the General Assembly passed legislation that prohibited PBMs from steering patients to affiliated drugstores. Georgia has also banned these entities from pressing pharmacists not to tell customers about drug price information, such as the cost of a cheaper drug.
State Insurance Commissioner John King’s office sent out directives to both insurers and consumers about the new legislation.
The steering issue, though, came up repeatedly at the January hearing.
Dillmon, the Rome oncologist, said many patients are ordered to get prescriptions from a mail-order pharmacy, which often leads to delays in acquiring and using the medicine.
“That’s not good health care,’’ she said.
Groover, fighting multiple myeloma, told lawmakers that she has to wrestle with a PBM’s mail-order operation to get a cancer drug. She described being bounced among customer service representatives.
“It’s exhausting and so time-consuming. Countless patients are going through the same struggles,’’ Groover said.
Small pharmacies take a beatingPharmacy groups say PBMs have especially hurt drugstores that are independently owned, and not part of large chains.
Sumner, whose medical school promotes rural health care, said community pharmacies “are under assault by pharmacy benefit managers.’’
A rural pharmacy is often the frontline health care provider in a rural county, Sumner said. A large chain drugstore could be a 45-minute drive away, and when patients are forced to go there it’s not only inconvenient for them but hurts the local pharmacy’s sustainability, she said.
Newly introduced legislation would strengthen Georgia’s current anti-steering laws, provide more transparency on prescription pricing, and require reimbursements to pharmacies based on a public benchmark. It would also order any drugmaker rebates be passed on to the insurer.
At Monday’s legislative hearing, the lead sponsor of Senate Bill 313, Dean Burke, R-Bainbridge, who’s a physician, said local pharmacies’ complaints about PBMs “are coming fast and furious.”
“Many members of the public are very frustrated with the (PBM) delays and lack of transparency,” Burke said.
Scott Woods of the PBM trade group Pharmaceutical Care Management Association said Burke’s bill contains 21 government mandates and would increase drug costs.
Greg Reybold of the Pharmacy Association, which supports the bill, urged lawmakers to ask the medical providers, pharmacies and patients in their districts about PBM practices. “The sickest patients are being steered to pharmacies owned by PBMs.”
There’s strong talk of upcoming legislation that would require the state to remove drug benefits from the managed care companies that deliver care to most Medicaid patients.
In other words, cutting out the current PBM arrangement.