We Can Do Better for Seniors Facing High Drug Prices
Washington has spent the majority of this year and the Trump presidency in a tug of war over trying to repeal and replace the Affordable Care Act. Now, after Congress has returned from August recess when Members of Congress undoubtedly heard from constituents on the issue Americans consistently rank as a top health care concern: runaway prescription drug prices.
This year alone, Americans are expected to spend more than $328 billion on prescription drugs. Of this amount, individuals will pay about $50 billion out of pocket.
These statistics are untenable, underscoring a harsh reality that Americans pay more for drugs than any other industrialized nation. We must do better. It’s time to have an open, honest conversation -- spanning both sides of the aisle -- to address one of the biggest drivers of escalating drug costs: pharmacy benefit managers, or PBMs.
Most people have never heard of PBMs, but they were created to process insurance claims for all patients and help negotiate discounts from drug manufacturers. Unfortunately, well-intended PBMs have outgrown their inception, and now they are configuring the system to put more money in their pockets -- often at the expense of sick seniors.
PBMs are taking advantage of our flawed health care system, leveraging their power as the “middlemen” and using financial engineering and other tricks to charge certain pharmacies more just to participate in PBM networks. This causes higher drug prices at the pharmacy counter for sick seniors and adds more to the taxpayer-funded Medicare bill.
Take just one example: Direct and Indirect Remuneration (DIR) fees. Big PBMs are imposing DIR fees on independent pharmacies in a variety of ways, which drives up out-of-pocket drug costs for sick seniors on Medicare -- many of whom don’t know why or how prescription drug prices keep going up.
And they’re not alone. That’s one of the most concerning things about PBMs: other pillars of the health care system -- drug manufacturers, hospitals, doctors, even Congress -- also have no understanding of the metrics PBMs use, but we know the result is increasing costs for prescription medications.
So, if a PBM negotiates a big discount on a wonder-drug from a manufacturer, will they pass it along to sick seniors? Currently, there’s no way of knowing. It’s time for a change. We need big PBMs, just like all stakeholders in the drug delivery channel, to show us how much these drugs really cost. Because the reality is stark.
Especially in their golden years, seniors on Medicare should not have to choose between taking the medications they need and putting food on the table.
If Washington really wants to make a dent in the cost of health care for Americans, it needs to demand transparency from PBMs.
We have no transparency now, and PBMs are working to keep it that way. PCMA, the trade association for PBMs, is running a campaign right now to tell Washington that Americans benefit when they’re kept in the dark on prescription drug pricing. They’re also working the backrooms of Congress to tell Washington to keep things the way they are. But we cannot afford to let big PBMs keep driving up costs for much-needed medications that are already too expensive for most sick Americans.
With over 40 million sick seniors relying on Medicare to cover the medications they need, we need Washington to step up and demand change by making PBMs open up the “black box” of information they’re hiding from the rest of the country. Only then can we assure transparency and responsible management of all taxpayer dollars, so sick seniors get access to life-changing or life-saving medications at the most appropriate price.
Sheila Arquette is the executive director of NASP, which represents thousands of specialty pharmacy health care professionals who provide medications to patients suffering from complex diseases including cancer, Hepatitis C, Crohn’s disease, HIV/AIDS, and multiple sclerosis.
A limited number of tickets are still available for NASP’s annual conference in Washington, DC at https://www.naspmeeting.com/registration.