Healthcare World Living “Month-to-Month” While Congress Debates Reform

PBMs and Drug Access
Recent debate about the cost of drugs, access, and the role of pharmacy benefit managers (PBMs), like Express Scripts, have raised the question: do PBMs keep costs down or cause them to ultimately climb higher? Some groups have charged the complex system of discounting serves to keep list prices of essential drugs artificially high, hurting groups like those with type 1 diabetes, who must have insulin to live.

Logan said PBMs play an important role, but that when it comes to organizing independents to participate in PBMs, it can be “like herding cats.” And Houts said some independents who joined PBMs didn’t understand what they were joining. “Everyone should go into these arrangements with their eyes wide open,” he said.

Reilly said the biggest challenges today are with benefit designs that require coinsurance for example, even if insulin is discounted for the payer, the patient’s portion is likely tied to the list price, “and that can be significant.”

“Many patients have one large deductible: pharmacy plus medical. It may be $4000 or $5000,” she said. “People are going to the pharmacy and paying list price, and never really feeling like you have insurance.”

Enter PBMs, which Reilly said have the ability to “pick winners and losers” by giving a competitor drug a lower price based on getting a larger discount. “Everyone benefits from that, I would argue, except for the patient.”

Houts pointed out that high deductible plans were increasing in popularity in the years prior to the ACA. The key, he said, is to limit out-of-pocket expenses, or they affect adherence. Logan agreed. Each year, he sees the effect of the “donut hole” on patients in Medicare, which is slowly closing under the ACA.

The panel discussed the need for price transparency, better access, and controls on utilization—and then Goodman asked Alspach how the proposal to impose per capita caps on Medicaid would affect drug access in that program, as well as why the issue is getting so little attention.

Alspach said that while Republican governors Rick Snyder of Michigan and John Kasich of Ohio have been very active on trying to keep expansion, both are nearing the end of their time in office, and it remains to be seen what will happen next.

Said Houts, “There are going to be 51 different ways to do this.”

He noted that unlike the federal government, which can run a deficit, states must balance their budgets, and it will be common for states to hit points around August or September when it’s clear they don’t have enough money to cover Medicaid prescriptions for the rest of the year. Solutions like allowing only 2 branded prescriptions or caps on the number of drugs will be more common.

Logan, who described his community as the heart of “fried chicken and catfish” country, said, “These are vulnerable patients. It’s really hard to make informed decisions about their health.”

The long-term problem, said Alspach, is “the entitlements are growing and growing, and squeezing out all the other discretionary spending.” The challenge for the federal government is to find ways to do more on the value side, to get more for the money that is spent.