As momentum builds for Congress to end the tactics pharmacy benefit managers (PBMs) use to game the health care system at the expense of patients, the PBM industry is funding a desperate misinformation campaign to stop reform.
One proposal that has bipartisan support in both chambers of Congress would require PBMs to be paid based on the services they provide instead of the price of a medicine. This would fix misaligned incentives that experts warn can lead PBMs to favor higher-priced medicines — medicines that make them more money through larger rebates and fees — over lower-cost alternatives — medicines that save patients money.
Through its trade association, PCMA, the PBM industry is falsely claiming this policy is a “bailout” for the pharmaceutical industry that would increase costs and premiums. These aren’t just baseless claims. They are a blatant attempt to mislead policymakers and avoid accountability.
Here are four things PCMA and the “experts” it funds don’t want you to know:
1. Breaking the link between drug prices and PBM profits would lower costs and increase choice for patients. It addresses PBM abuses that experts and government agencies widely agree can lead to patients paying more than they should at the pharmacy counter. The Congressional Budget Office (CBO) estimates it would save $700 million Medicare Part D over the next decade when paired with transparency measures. CBO says a similar policy in the commercial market would save $650 million over the same period. These savings would be shared by taxpayers, employers and patients at the pharmacy counter.
2. There is a growing chorus of voices calling for PBM reform. Despite what the PBM industry wants the public to believe, there is strong bipartisan support for PBM reform on Capitol Hill. At the same time, the Federal Trade Commission, state lawmakers, state attorneys general, patient groups, pharmacists, labor, employers, smaller PBMs, and many more are all advocating for changes to the broken PBM business model. Even AARP is calling for reform.
3. PCMA is misrepresenting the proposed policy. PCMA’s central argument is that delinking legislation would prevent PBMs from negotiating rebates or entering into pay-for-performance contracts. But that’s not what the policy does. Instead, it prevents PBMs from tying what they get paid to the price of a medicine. They are still free to negotiate rebates and charge fees based on the value of their services. PCMA claims they want “performance-based incentives.” Good news — that’s exactly what PBM reform would deliver.
4. PCMA is misleading policymakers about how the market works today. PCMA claims PBMs wouldn’t have an incentive to negotiate lower costs for their clients if they can’t profit off of the rebates they tie to the list price of medicines. But PBMs already pass nearly all rebates to insurers in Part D and claim they do the same in the commercial market. And they still continue to negotiate larger rebates every year. What PCMA doesn’t say is that PBMs are shifting their business model to hide the ball. Research shows PBMs are getting a significantly larger share of their profits from fees.
We already knew PBMs put profits before patients. Now, they are putting misinformation before the facts. Lawmakers shouldn’t fall for it.