Pharma—PBM War on Drug Prices Picks Up Steam

The blame game of who is responsible for jacking up drug prices is at the cusp of turning into a full-blown war. A leaked e-mail, from Mark Merritt, president and CEO of the trade group Pharmaceutical Care Management Association (PCMA), to the organization’s board, lays out a plan to develop an aggressive campaign to convince the new administration that the fault rests with pharmaceutical manufacturers.

The e-mail, which was sent to the board in the first week of February, states that PCMA plans to develop a hardline strategy that will involve the Trump administration and “counter efforts to undermine PBMs’ [pharmacy benefit managers’] ability to reduce cost for payers and consumers.” The organization is trying to fast-track this process rather than go the traditional route of presenting a strategic update once key officials and new policies were in place, because they are unsure of the responses from a nonconventional presidency that does not seem to have faith in a deliberative process.

The 6-point plan that Merritt presented to the board lists the following strategies:

1. Engaging key officials within the new administration on the PBM value proposition. PCMA is already working to identify and set up meetings with key staffers who will influence prescription drug issues. They also plan to meet with advisers of newly confirmed HHS secretary, Tom Price, MD.
2. A digital advertising campaign directed at policy makers. This advertising platform, which has already broken ground, is promoting the PBM value proposition to the new administration, key policy makers, opinion leaders, and others.
3. Building a “firewall” on Capitol Hill. PCMA is targeting 4 Congressional committees with jurisdiction for healthcare to educate them on drug pricing issues
4. Developing ways to leverage PCMA’s 73,000 grassroots allies. PCMA is planning to tap into these resources to drive their message in key districts throughout the nation.
5. Shaping the PBM regulatory environment. The organization will meet with officers within the Office of Management and Budget who review the cost implications of proposed rules prior to approval. PCMA is updating its workgroups and identifying areas where guidance and regulation can be altered or withdrawn to advance PBM goals. These include:

• Medicare Part D workgroup
• Healthcare reform workgroup
• Medicaid workgroup
• Nondiscrimination rule workgroup

6. Mobilizing pro-payer allies and policy solutions. Efforts are on to align with health plans on their approach to the drug price issue. This will include conversations with the America’s Health Insurance Plans, The American Action Forum, and others.

Referencing the recent meetings between top drug manufacturers and the president, Merritt states in his e-mail that the blame was placed squarely on “bloated supply chains.” In a separate meeting of Stephen J. Ubl, CEO of the Pharmaceutical Researchers of Manufacturers America (PhRMA) and 6 members of the PhRMA board with President Donald Trump, the following strategies for drug price reduction were discussed:

• Accelerating FDA approvals
• Tax incentives to encourage research and development
• Incentives to bring drug manufacturing jobs to the United States

Meanwhile, underscoring the urgency of the issue at hand, Merritt wrote that it is important that “we cut through the clutter and make our case as vocally and effectively as possible.”

PBMs have been accused of implementing practices that drive up drug prices. A recent white paper commissioned by the Community Oncology Alliance, for example, blamed PBMs of administering direct and indirect remuneration, or DIR, fees that inflate prices for Medicare Part D beneficiaries. PCMA out rightly denied the report’s findings.