SAN DIEGO—Pharmacy benefit managers (PBMs) pose an alarming barrier to access to patients’ medications, in a system full of incentives that drive prescribing of more costly treatments, a rheumatologist and advocate for prescribing transparency said at ACR Convergence 2023.
“They really have almost complete control over what we can prescribe, by creating formularies and influencing every other player that comes into the space of prescribing medications for our patients with inflammatory diseases,” said Robert Levin, MD, president of the Alliance for Transparent & Affordable Prescriptions (ATAP) and a rheumatologist with a private practice in Clearwater, Fla.
In a session on Challenges in Access to Care, Dr. Levin and others spoke about common payer practices and policies that rheumatologists must navigate to secure and maintain appropriate care for their patients.
PBMs are nearly “one and the same” as insurers, Dr. Levin said, because the largest are owned by or associated with insurance companies, and PBMs control 80% of the prescriptions that are run through insurance companies in the U.S.
“There are three of them,” Dr. Levin noted. “It’s an oligopoly, and it controls so much.”
The supply chain of medications includes a number of points at which PBMs exert control in ways that can impair access, he said. Plan-sponsored pharmacies are favored by PBMs because the PBMs own the pharmacy, he said. In addition, drug manufacturers have no choice but to interact with PBMs because the PBMs control market access through “rebates”—essentially, fees—paid to the PBMs. The rebates are determined in a kind of secret auction in which one manufacturer doesn’t know what the others are offering for rebates. They are based on a drug’s list price and market share, or number of prescriptions. Therefore, PBMs have an incentive to get higher cost medications onto formularies, Dr. Levin said.
“The manufacturers are basically in a pay-to-play situation, and that’s a big problem,” he said.
PBMs profit from what is known as spread pricing, the difference between what the PBM charges a health plan for a drug and what the PBM reimburses the pharmacy for dispensing it. These amounts are not made known, allowing PBMs to capitalize on this lack of transparency and collect the spread.
Some states are requiring that PBMs disclose rebate amounts and have banned spread pricing, but problems persist, Dr. Levin said.
Challenges with Prior Authorization
Some pharmacies are pursuing their own ways to navigate the challenges presented by PBMs. For example, they may consider what the drug costs to manufacture, add a fee and use that as the basis for the patient price, without needing to go through insurance.