- The House Health & Human Services Committee hosted a panel of individuals working in the pharmaceutical industry on Tuesday, where it was stated that just 3 Pharmacy Benefit Managers control 80 percent of the prescription volume market.
- Pharmacy owners have complained for years that PBM practices are anti-competitive and predatory, resulting in decreased patient access to medication and higher consumer costs.
- The Publix Director of Pharmacy Operation claims that through contracting processes, PBMs restrict the services that pharmacies like Public are capable of.
- Earlier this month, Gov. Ron DeSantis announced that he plans to sign laws into effect to increase transparency in the pharmaceutical industry.
Amid an impending crackdown on Pharmacy Benefit Manager (PBM) regulation in Florida, the House Health & Human Services Committee paneled a series of pharmacy owners and doctors, where it was stated that just three PBMs control 80 percent of the prescription volume market.
Presenters in favor of PBM regulation explained that the consolidation of negotiating power by three large-scale PBMs — OptumRx CVS, Caremark, and Express Scripts — shuts out smaller pharmacies.
Looking deeper into the trio of PBMs, Caremark controls 33 percent of the market, Express Scripts 26 percent, and OptumRx CVS 21 percent, according to statistics shown by Kristen Pardy.
Moreover, Manufacturer Price Concessions to PBMs reached $236 billion in 2022, more than doubling since 2012.
“There’s been significant consolidation in vertical integration over the last several years, where we hear the promise of increased access and lower costs, but we see the opposite,” Publix Director of Pharmacy Administration Katie Scanlan told the committee. “The PBMs, through the contracting processes, restrict the services that community pharmacies like Publix can offer.”
Those speaking in front of the committee claim that PBM practices are anti-competitive and predatory, resulting in decreased patient access to medication and higher consumer costs.
“Most egregiously, PBMs are hurting patients,” said panel participant Kevin Duane. “Not only are these middlemen raising patients’ out-of-pocket costs by almost 30 percent, but they’re also limiting access to medication by steering patients to affiliated pharmacies, which disrupts, delays, and generally undermines quality care.”
The comments were delivered as the state weighs its options to handicap PBM activity.
Earlier this month, Gov. Ron DeSantis laid out his plan to work with state lawmakers during the upcoming Legislative Session to pass a series of laws to “increase transparency” in the pharmaceutical industry.
According to the governor, the pieces of legislation will impose a range of regulations and guidelines including, but not limited to, consumer and small business protections and requirements that drug manufacturers must disclose proposed price increases before they take effect.
Further, the proposal seeks to enact anti-steering measures, preventing the implementation of a pharmaceutical network that only includes PBM-affiliated pharmacies.
“These reforms will enhance transparency and reduce the influence of pharmacy middlemen, which will help consumers as well as our small pharmacies,” said DeSantis. “I look forward to these reforms becoming law.”
A 2020 Florida study found that major healthcare companies using PBMs positioned themselves to pocket millions of dollars from the state’s Medicaid system.
The study also found that despite processing less than half of one percent of all pharmacy claims, specialty pharmacies affiliated with PBMs managed to collect 28 percent of the available profit margin from dispensing prescription drugs.
According to the study, vertically integrated healthcare companies – companies where the health insurance company and PBM also control their own pharmacies – have a significant advantage in prescription drug pricing and reimbursement rates over smaller pharmacy operations that only focus on dispensing prescription drugs.
I have recently experienced this, having switched jobs, and therefore also insurance. The new health insurance company tells me where I can get my prescriptions. Naturally, if I don’t want to pay full price, I have no choice. And I find myself going to two different pharmacies now.