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Another View: Richard Pezzillo -- Shining a spotlight on pharmacy benefits managers in NH

By Richard Pezzillo | New Hampshire Union Leader

THERE ARE TENS of millions of people in the United States who have one or more chronic illnesses. About 20,000 people in the United States have hemophilia, while approximately 1.4 million Americans have another bleeding disorder called von Willebrand Disease (vWD).

Each person is dependent upon affordable, accessible medicines that can help manage their conditions and offer hope for a longer, healthier life. This means that they are at the mercy of a complicated and often burdensome health-care system that can all too often make the costs of these critically needed prescription drugs artificially and unnecessarily high.

There is a concerted effort underway here in New Hampshire to shine a spotlight on the practices of pharmacy benefit managers (PBMs) — the companies that serve as middlemen negotiators between the companies that make prescription medicines and insurers, like Medicaid or employee health plans.

What was intended to be a system that resulted in lower costs for patients has frequently not worked out that way. Instead of seeing negotiated discounts being passed along to the patient at the pharmacy counter, PBM profits have risen and their dealings have largely been shrouded in secrecy. For patients, the result is often paying more than absolutely necessary at the pharmacy counter.

That’s why the New England Hemophilia Association joined with other groups representing New Hampshire consumers, patients, and working families to form the PBM Accountability Project of New Hampshire.

At a time when drug pricing is in the headlines on a regular basis — and many more treatments and therapies will be emerging from the pipeline to control and even cure serious illnesses — it’s important that we bring the PBM pricing practices out of the shadows and enable people to better understand why they pay what they do at their local pharmacy.

Our work builds on momentum that is already taking place in our state. Governor Sununu recently signed a bill that will create a commission to study greater transparency in pharmaceutical costs and drug rebate programs. We are grateful to the governor, Senate President Soucy and fellow co-sponsors of SB 226, along with members of the Executive Departments, Administration Committee and the Commerce and Consumer Affairs Committee for their work on this legislation.

This transparency is long overdue. The commission is sure to uncover many ways that PBMs profit at the expense of individuals, employers and our state and local governments.

In various states throughout the country, PBMs have utilized a practice commonly known as “spread pricing” in which pharmacies receive just a tiny fraction of the dollars the PBMs get from the insurer. This scheme involves a PBM negotiating a dollar amount it will receive from an insurer for each prescription drug and then usually determining a lower amount with the pharmacy that dispenses the drug to the consumer. We’re witnessing the closing of local pharmacies in our state, in no small part, because of these insufficient reimbursements from the PBMs.

And then there are the scenarios that result in PBMs getting larger rebates for some drugs than they do for others and subsequently requiring that patients get the drug with the higher rebate — also higher profit for the PBM — even if it’s not what their doctor prescribed.

If that all isn’t bad enough, until Congress stepped in and forbid it, PBMs would even require pharmacists to keep quiet and not tell their customers if they could save money by paying cash for their medicine instead of using insurance.

Through the PBM Accountability Project of New Hampshire, we will work together to ensure public knowledge and scrutiny of these practices and examine alternative approaches that could maintain affordable access to medicines while reducing costs.

In New Jersey, for example, the creation of a competitive marketplace in which PBMs must bid against each other for the state’s business has reduced the state’s prescription drug spending by $1.6 billion over three years without any reduction in pharmacy benefits for state employees.

The point is, if there are discounts and rebates being negotiated on prescription drugs, then the consumer should not be shut out of those savings just so major companies can have a better bottom line. For the people in our state who are battling bleeding disorders, and the millions throughout the country with similar challenges, we know that there are ways to lighten the financial burdens that come with treating their ailments.

Understanding what these middlemen are doing, and addressing the flaws in the pricing system, is a necessary step forward.

Richard Pezzillo is executive director of the New England Hemophilia Association.



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