Introduction to Rising Prescription Drug Costs
Concerns about high drug prices can take a significant toll on Americans every day. A new West Health-Gallup study has revealed that only 55% of Americans feel they can afford their healthcare and prescription drugs, marking a six-point drop in just one year. Thankfully, Congress has a rare bipartisan opportunity in this upcoming lame duck session to tackle one of the primary drivers of this crisis: pharmacy benefit managers (PBMs).
The Role of Pharmacy Benefit Managers
These powerful middlemen oversee prescription drug access for millions of Americans, operating under a business model that raises questions about legality and ethics. PBMs represent for-profit insurance companies and dictate substantial rebates and discounts off the nominal “list” price of medicines while also deciding which medicines are covered under various insurance plans.
The Impact on Patients
The practices of for-profit PBMs often leave patients paying copays and coinsurance based on inflated list prices. The West Health-Gallup study reports that “72.2 million Americans avoided necessary medical care in the past three months due to cost.” Such alarming statistics highlight the growing concern over accessibility, particularly for vulnerable populations who frequently find themselves unable to afford their medications.
Proposed Legislative Solutions
One significant remedy to this troubling situation involves reforming the operational framework of PBMs. Two bipartisan bills currently under consideration offer promising solutions. The first, the Modernizing and Ensuring PBM Accountability Act, aims to “delink” PBM compensation from drug prices, compelling them to charge flat fees based on services provided rather than a percentage of a drug’s list price. This could eliminate their incentive to favor higher-priced medications.
The second bill proposes that patient cost-sharing be based on a drug’s actual net price, reflecting what insurers pay after discounts rather than inflated list prices. This simple yet pivotal change could significantly reduce out-of-pocket costs for patients suffering from chronic conditions such as asthma and heart disease.
The Bigger Picture: Health Risks and Financial Strain
The ramifications of these PBM practices extend beyond financial distress. When patients cannot afford their prescribed medications, manageable chronic conditions can spiral into medical emergencies, leading to costly hospitalizations and overwhelming the healthcare system. Independent community pharmacies, which play a critical role in serving vulnerable populations, are particularly strained by PBM practices, exacerbating the issues at hand.
Conclusion: A Call to Action
Congress now faces a crucial opportunity to tackle PBM overreach and the resulting harms inflicted upon American patients. A strong majority of the population from both major political parties are calling for change. While these reforms will not resolve every healthcare issue, they would represent a significant step toward improving transparency and prioritizing the needs of patients.
Salvatore J. Giorgianni, PharmD, CMHE is the Vice-President and Cofounder of Healthy Men Inc. and Chair-Emeritus and Cofounder of the American Public Health Association Men’s Health Caucus. This piece originally ran in Medical Economics.
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