The amount of rebates and fees collected by insurers and pharmacy benefit managers (PBMs) drive formulary positions and access for brand name medicines. The ruse that formularies are devised based on clinical data has been peddled for far too long. This latest scheme is another reminder that we have a broken system taking advantage of our most vulnerable citizens.
While average per capita out-of-pocket spending for biopharmaceuticals has dropped over the past decade, the averages are deceiving. Patients who are older, under or uninsured, or are living with complex diseases find that they are significantly burdened with out-of-pocket costs for the medicines they take. Such patients need help through fundamental changes in the way medications are priced, contracted for, and reimbursed. They deserve better than gimmicky policies that undermine a provider and patient relationship and clinical decision making.
If insurers and PBMs are serious about helping such patients, they should pass through all the rebates, fees, and concessions they collect from the biopharmaceutical companies. After all, every other segment of the healthcare system allows patients to benefit directly from prices negotiated on their behalf. Somehow insurers and PBMs have convinced policymakers and employers that such a policy is inconceivable for the biopharmaceutical market.
The elimination of rebate contracting or passage of all rebates, fees, and concessions at the point of sale to a patient is not a novel idea. These policy positions have been proposed, debated, discussed, dismissed, supported, and vilified at both the state capitals and Washington D.C.
Lest we forget, data released by none other than a competitor to Cigna, Optum, a PBM, and part of the United Health Group, concluded that for self-funded employer customers, when negotiated prescription plan discounts were passed on, patients saved an average of $130 per eligible prescription. In addition, prescription drug adherence improved by up to 16 percent. In other words, patients paid less out of pocket and were more compliant with the medications they were prescribed. Most importantly, the savings were significantly higher than the enticement of a one-time $500 windfall.
A study published last year in Health Science Journal by Dr. Wayne Winegarden and I concluded that removing the safe harbor protections for rebates on prescription drugs paid to PBMs and Part D plans would reduce the excessive costs that patients are inappropriately bearing. The reform will not meaningfully increase costs for the government, as some critics of the policy assert.
There is no denying that we need to address the healthcare cost dilemma. We also need to address the out-of-pocket burden for a small number of patients. Policies that achieve both goals ought to be pursued and welcomed. Unfortunately, for many patients, $500 is a resource they can use for rent, food, or a car payment, making it impossible to ignore. However, preying on patients to make a medical decision with short-term benefits and unknown future consequences is obliterating the patient and provider relationship and providing the wrong policy solution.
Robert Popovian, Pharm.D., MS is a Senior Health Policy Fellow, Progressive Policy Institute, Chief Science Policy Officer, Global Healthy Living Foundation and Member Board of Councilors, University of Southern California, School of Pharmacy
This article is reprinted from Healthcare Business Today Team with its permission
