PBMs Must Put Patients First

02/28/2017 07:12 pm ET Updated Feb 28, 2017

It’s only February, but we have a clear front-runner for most suspicious ad campaign of the year.

For several weeks, it seemed you couldn’t check out a video on YouTube or pull up an Internet news site without seeing an embedded and unprecedented public branding effort extolling the virtues of pharmacy benefit managers (PBM’s and the savings they generate as a broker of patient medicine.)

But this was no ordinary commercial campaign. Why would an industry practically no one has ever heard of spend considerable resources running a clever branding campaign for something none of us can buy on our own?

This has everything to do with the repeal, replacement or repair of Obamacare, now moving at a – what’s the word? – incremental pace. And the PBM industry wants to be well-positioned. When you find out just how tenuous their place in the health care ecosystem is, it’s easy to understand why.

Obamacare won’t be gone in the first 100 days of the Trump Administration, which may be a cause for optimism. With something this large and profoundly impactful on the country, why not dedicate to deliberate than commit to a need for speed?

And if Republicans are similarly wondering why so many people are skeptical or even fearful of GOP efforts in this space, there’s a good reason: They’ve seen health care reform up close, and for many, they didn’t like it. File this under: Fool me twice, etc.

This is health care policy’s national credibility gap, and for people to have sufficient confidence that change will do them good, reform should resolve to clear the smokescreen that habitually surrounds the system, take public input seriously and understand that patients are smart enough to understand reform ideas.

Like tectonic shifts, the major parts of health care are starting to slam together, an emerging impact of coverage, cost and access.

Here’s why: At its most fundamental, health care is supposed to be about a doctor, a patient and medical treatment. Increasingly, however, it is about insurance design, drug middlemen and rebates/coupons.

To be sure, all parts of the health care ecosystem should commit to addressing cost, streamlining access and ensuring continued innovation.

But this is made ever more difficult when PBM’s are increasingly involved in the most important part of the patient experience – while at the same time increasingly funded by money that is intended for patient relief.

Did you know they are responsible for developing, maintaining and negotiating discounts and rebates from drug manufacturers? How about concocting formulary lists that dictate if a patient will receive doctor-prescribed medications? Or that they get money from processing prescription drug claims?

How could costs to patients not go up in this system?

Dr. Robert Goldberg of the Center of Medicine in the Public Interest says the problem is not just monetary: “The PBMs and insurers are harming the health of patients with chronic and rare diseases by limiting access and charging them retail for drugs they buy at deep discounts.”

Goldberg concludes that nearly $120 billion in rebates and discounts that could be passed along to consumers is being pocketed by PBMs, insurers, and government health programs. On top of that, consumers are paying about $30 billion of the retail price of medicines in the form of out of pocket costs.

If PBM’s truly want to bring benefit to patients, they need to stop being so heavily invested in higher and higher system costs and instead have a greater stake in generating system savings – especially to patients

Obamacare reform will fail if it simply or only addresses current problems in budget management and saves patient access challenges for another day. Rather than trying to put scotch tape and glue on a system that’s clearly coming apart, it’s time for the conversation of plan repeal to usher in a new era of access, innovation and regulatory review that doesn’t disadvantage providers or payers.

In this way, patients burned once by “reform” can win twice by “replace”: patient-friendly changes in the overall system and redirected to a default setting that puts them first among equals.

Jonathan Wilcox is the Co-Founder and Policy Director of Patients Rising and Patients Rising NOW.

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