Opinion pieces for and against pharmacy benefit manager reforms in the news
By Melissa Patrick
Kentucky Health News
The Kentucky General Assembly has worked for years to pass laws aimed at reining in the practices of pharmacy benefit managers, saying they create an unfair playing field in dealing with independent pharmacists.
Most recently, it passed Senate Bill 188, sponsored by Sen. Max Wise, R-Campbellsville, which changes laws governing commercial PBMs, aimed at keeping the state’s independent pharmacies from closing. Among other things, SB 188 also sets dispensing fees, bans PBMs from forcing patients to get their drugs through mail order, and keeps them from steering patients to pharmacies that they own.
The PBMs argued that the law will cause insurance premiums to increase and its mandates in the bill won’t allow businesses to gain from savings that PBMs offer.
PBMs act as the middlemen between insurance companies and drug manufacturers; they can determine what drugs are offered, how much someone pays for the drug, and how much the pharmacists are paid.
Arguments for and against PBM reform in the news
In an Aug. 13, Louisville Courier Journal opinion piece, Stephanie Wright, a registered nurse and employee of Elevance Health, formerly known as Anthem, wrote in support of PBMs.
Wright called SB 188 anti-consumer legislation, writing that it will drive up the cost of health care costs. Further, she wrote that SB 188 takes away Kentucky employers’ ability to work directly with PBMs to create drug benefit programs that their employees can afford. Laws like this, she said, will discourage businesses from coming to the state.
“The truth is, PBMs negotiate lower drug prices with manufacturers and pharmacies, ultimately reducing prescription costs for Americans. They help drive affordability for consumers through their negotiations with drug manufacturers, despite some perceiving them as reducing revenue for pharmacists and pharmaceutical companies. And, they work to improve patient outcomes through better adherence and by preventing potentially harmful drug interactions,” she wrote.
In response to Wright’s opinion piece, Wise issued a press release on Aug. 14 that called Wright’s opinion piece a “false alarm” and stated that despite these scare tactics, there is hard data to support the need for SB188. The release is printed in full in the Lexington Herald-Leader.
“The new law created by Senate Bill 188 protects our local pharmacies from unfair PBM practices that have led to the closure of 99 independent community pharmacies in our state in the last three years,” said the release.
The release pointed to the savings found when the General Assembly passed SB 50, also sponsored by Wise. Among other things, the 2020 law required the state to hire a single PBM to manage Kentucky Medicaid’s prescription drug business of more than $1 billion a year.
“Insurance companies often push the false narrative that PBM reform will increase insurance costs for businesses and taxpayers alike. That is simply not true, and the actions of the Kentucky General Assembly proved it,” Wise wrote. “If we want to focus on profits, here are the figures: not only did SB 50 not cost our state money as the PBM’s swore to legislators it would, but it actually saved our state over 280 million dollars and counting according to a report presented by the Cabinet for Health and Family Services.”
Rosemary Smith, who owns six pharmacies across Eastern Kentucky with her husband, Luther, and is co-founder of the Kentucky Independent Pharmacist Alliance, also responded to Wright’s opinion piece in the Courier Journal.
In her support for SB 188, Smith points to a Federal Trade Commission‘s interim report issued in July that supports the General Assembly’s and independent pharmacies’ ongoing arguments against PBMs.
She also writes that the PBMs’ practices of paying independent pharmacies below the cost of the drugs they dispense and steering their patients to the retail, specialty and mail order pharmacies that they own have contributed to the closing of independent pharmacies across the state.
One of those set to close on Aug. 21 is Owensboro Family Pharmacy, which has served its community for 39 years. Smith shared a Facebook post from the closing pharmacy that she said, sums it up: “For those that have been asking how we got settled on the decision to sell – it’s an unsustainable business model that insurance (PBMs) control. We can either take care of our patients and dispense their meds and lose money, or send them elsewhere and lose a patient. There is no winning and it’s set up this way on purpose by those who profit from it – while hurting your budget with high copays, and hurting local small businesses to pay large corporations’ CEO salary. It’s time for reform and change.”
Federal Trade Commission report
As part of an ongoing inquiry launched in 2022, a 73-page FTC report found that PBMs “wield enormous power over patients’ ability to access and afford their prescription drugs, allowing PBMs to significantly influence what drugs are available and at what price,” according to a news release. It also found that “they hold substantial influence over independent pharmacies by imposing unfair, arbitrary, and harmful contractual terms that can impact independent pharmacies’ ability to stay in business and serve their communities.”
It pointed to the impact of increased consolidation and vertical integration has had on how people obtain their drugs, noting that the three largest PBMs process nearly 80% of the prescriptions dispensed by U.S. pharmacies in 2023, and the six largest ones process more than 90% of them.
The Pharmaceutical Care Management Association, the national PBM lobby, pushed back on the report, saying in a news release, “The report completely overlooks the volumes of data that demonstrate the value that PBMs provide to America’s health care system by reducing prescription drug costs and increasing access to medications.”