As Congressional momentum to pass pharmacy benefit manager (PBM) reform builds, the PBM industry has launched a misleading, last-ditch effort ad campaign to stop reform.
One key proposal, backed by wide bipartisan support, would delink PBM fees from the list price of a medicine, instead tying PBM payments to the services they provide. This policy would eliminate incentives for PBMs to favor higher-priced medicines that make them more money through rebates and fees over lower cost alternatives that save patients money.
The PBM trade association, PCMA, is trying to scare patients and seniors with false claims that these bipartisan reforms will raise costs and provide a “bailout” to the pharmaceutical industry.
Here are four critical truths that PCMA is hiding from patients:
- Delinking drug prices from PBM profits will correct misaligned incentives that drive up patient costs. Breaking the link between PBM compensation and the price of medicines helps patients save money. Fixing PBMs’ misaligned incentives to prefer higher-priced medicines would generate savings by increasing coverage of lower cost alternatives. Patients, especially those with deductibles and coinsurance, would directly benefit via lower out of pocket costs from expanded coverage of lower-priced medicines.
- PCMA misrepresents delinking and distorts data. PCMA claims delinking would stop PBMs from negotiating rebates. This is false. Delinking prevents PBMs from tying their payment to the list price of a medicine, not from negotiating rebates or charging for the value of their services. PBMs would still be free to negotiate rebates and fees based on performance-based compensation, aligning with their own requests for such incentives. PCMA also ignores that PBMs increasingly profit from hidden fees, which have surged over 300% in the last decade.
- Delinking lowers premiums and expands patient choice. The Congressional Budget Office’s (CBO) estimates that delinking could save $700 million in Medicare Part D and $650 million in the commercial market when paired with PBM transparency initiatives. These savings would be shared by taxpayers, employers, and patients. The CBO also found that these policies are likely to lead to lower premiums.
- PBM reform has broad support beyond the pharmaceutical industry. PCMA claims that only the pharmaceutical industry supports delinking, when in reality pharmacies, providers, employers, AARP and others are urging policymakers to pass these critical PBM reforms now. Recent investigations by federal and state regulators, state Attorneys General, Congress, and the media have also highlighted the problems with PBM practices, including allegations by the FTC that PBMs favor high-list-price drugs over affordable alternatives, marking up the cost of medicines at pharmacies they own and charging patients more.
PBMs are doing everything they can to stop reform.
Why are PBMs pushing these last-ditch, misleading ads now? Because a large group of bipartisan stakeholders are pressuring Congress to pass PBM reforms and curb PBMs from putting profits over patients. It’s time to hold these middlemen accountable.
Nick McGee
Nick McGee is deputy vice president, public affairs, at PhRMA focusing on communications strategies and activities for the organization’s advocacy priorities.
Nick McGee
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The PBM industry's desperate attempt to stop reform
PBMs/Insurance
The PBM industry's desperate attempt to stop reform
The PBM industry's desperate attempt to stop reform