As patients faced both high rates of inflation and record high costs at the pharmacy counter, President Biden signed the Inflation Reduction Act (IRA) into law in August 2022. The IRA significantly impacts how patients can access their prescription medicines and how future innovations will be brought to market. While the law includes provisions that will help patients living with chronic conditions access the medications they need, the path remains for industry middlemen known as pharmacy benefit managers (PBMs) to use harmful and profit-seeking practices to hurt patients without consequence. Unless Congress takes action to pass comprehensive reforms around PBM practices, price “negotiation” policies for prescription medicines will fall short of lowering costs for patients.
PBMs, often described as middlemen, are for-profit businesses that pocket discounts and rebates they negotiate with companies that develop prescription medicines instead of passing them on to patients as negotiated. Before patients can access the treatment their provider prescribes, PBMs exert their outsized influence on the process. They leverage utilization management (UM) protocols that put barriers between a patient and their medicine. If not implemented and managed properly, these programs impede treatment access for patients, lower rates of medication adherence, and negatively impact overall health outcomes and health system costs.
By putting medications on formulary tiers too costly for many patients, denying the value of copay assistance towards patient cost-sharing requirements, or making patients try and fail on other medications first, PBM practices disrupt the process patients use to manage their health. I have heard directly from physicians that, in some cases, it has taken three to four months for their patient to access a medicine that works for them. One study showed that one in three cancer patients and caregivers of cancer patients reported delays in treatment because their physician was waiting on approval from their health insurance plan for a medication or test. Patients living with chronic conditions simply do not have time to wait, as they look to manage their conditions, avoid painful symptoms, and stop the disease progression.
As these predatory practices have become more prevalent across the country, states have taken action to protect patients. As of March 2023, 35 states have enacted legislation that includes patient-centric protections from step therapy. 19 states and Puerto Rico have passed laws prohibiting copay accumulator policies in state-regulated health plans. More than 10 states have passed legislation that ensures that PBMs pass on the rebates they negotiate with manufacturers to patients at the pharmacy counter.
In Washington, members of Congress have shifted focus to these industry players and policies that impede patient access to treatments. Reaching across the aisle in both chambers of Congress, policymakers have introduced numerous bills to increase transparency within PBM operations. This federal focus has extended to the UM protocols that can block treatment access, with legislation such as the Safe Step Act and the HELP Copays Act seeking to establish patient protections from these opaque PBM tactics. Bipartisan support for these legislative efforts underscores the broad consensus around the need to address the significant barriers that patients face to access care. And just recently, the U.S. District Court of the District of Columbia struck down a federal policy that allowed health plans and PBMs to not count the value of copay assistance toward patient out-of-pocket costs.
It is undeniable that the IRA includes certain provisions that will help patients. However, the law misses a critical opportunity to address real drivers of patient out-of-pocket costs – the PBM practices that keep out-of-pocket costs high and interfere with treatment access. Instead, the IRA’s price setting policies could result in an increase in UM tactics and other restrictions – a step in the wrong direction as members of Congress advance bills to address these very practices and protect treatment access for patients.
As patient communities, families and individuals grapple with the impending impacts of price “negotiation,” they continue to be faced with managing the burden of harmful PBMs and payer tactics. Tactics that make the impact of their disease worse through the additional burden, stress, and inability to get the treatments they need. Washington must act with urgency to rein in PBMs’ use of discriminatory UM tactics and their ability to manipulate the market of prescription medicines, including in “negotiation” policies, otherwise patients will continue to lose out.
Liz Helms is Founder and Director of the Chronic Care Policy Alliance (CCPA), a network of state and regional advocacy organizations advancing public policy that improves the lives of those living with chronic conditions and diseases.
