American Prospect calls out PBMs
American Prospect has published an article for its spring issue that delves deep into the hidden practices of PBMs. "The Hidden Monopolies that Raise Drug Prices," by David Dayen, begins from the perspective of an independent pharmacist. Most patients who use independent pharmacies don't know that the business they are supporting may be struggling to deal with unknown fees and conditions imposed on them by PBMs. Dayen writes, "'I get a prescription, type in the data, click send, and I’m told I’m getting a dollar or two,' Frankil says. The system resembles the pull of a slot machine: Sometimes you win and sometimes you lose. 'Pharmacies sell prescriptions at significant losses,' he adds. 'So what do I do? Fill the prescription and lose money, or don’t fill it and lose customers? These decisions happen every single day.'"
The article outlines not just how PBMs function, but also puts them into the context of the wider healthcare system. Dayen explains how PBMs raise the cost of drugs and inflate the cost of healthcare more generally, and how inadequate antitrust enforcement has failed to stop the problem PBMs pose to the system.
David Balto is also quoted in the article:
"This lack of transparency enables PBMs to enjoy multiple hidden revenue streams from every other player. 'It’s OK to have intermediaries, we have Visa,' says David Balto, an antitrust litigator and former top official with the Federal Trade Commission. 'But these companies make a fabulous amount of money, even though they’re not buying the drug, not producing the drug, not putting themselves at risk.'"
..."Worst of all, PBMs don’t stop at legal money-making schemes. At his site PBM Watch, attorney David Balto compiled 56 pages’ worth of state and federal litigation against PBMs. Just a handful of these cases yielded $370 million in damages for undisclosed rebates, artificial price inflations, kickbacks, steering, and other deceptive practices."
Dayen ends by outlining some proposals that are already out there for addressing issues in the PBM market and the problems PBMs cause for other actors. He also calls attention to the "wildcard" in this debate -- President Trump. But he leaves the reader on a hopeful note:
"With drug companies on one side and PBMs and insurers on the other, both camps will have plenty of resources. In that environment, is bipartisan action possible to break up a powerful monopoly? 'My answer would be absolutely,' says Representative Carter. 'Everyone is impacted by prescription drug prices.'”