That Man Behind the Curtain? Pay No Attention

By Kevin Schweers

Confusion and complexity are arguably critical to how pharmacy benefit managers (PBMs) are so profitable. Perhaps it should come as no surprise that those methods are also integral to their most recent efforts to thwart pro-patient, pro-pharmacist policies.

The PBM trade group is touting a “study” by an organization with an acronym that is familiar to most pharmacists: NCPA. Only in this case it is not the National Community Pharmacists Association. Rather, it is an entirely different organization known as the National Center for Policy Analysis, a self-described public policy research organization primarily funded by corporations and foundations. The PBMs thereby hope to capitalize on confusion over “NCPA” and muddy the waters for policymakers.

This most recent “study” is a one-sided regurgitation of questionable claims previously made by PBMs, with the intent of growing their billion-dollar profits at the expense of patients, payers, local economies and community pharmacists.

In order to reward shareholders and finance lavish executive compensation, PBMs engage in a wide array of activities that negatively impact consumers, community pharmacists and payers. Because PBMs are so large and influential in the pharmacy marketplace, legislation and regulation are the only means of relief for patients and community pharmacists.

PBM Iron Curtain

Here are some points to keep in mind when reviewing the PBM-promoted study:

Mail order

Mail order is not for everyone and most patients prefer to use a local pharmacy for face-to-face consultations and, in some cases, same-day, home delivery. Moreover, many patients experience problems with mail order pharmacy, including late deliveries or auto-shipping of unneeded medication, which is why the PBMs have to require or coerce (through copay differences) patients to use mail order pharmacies typically owned by the PBM (raising significant conflict of interest concerns).

Medicare officials echoed these concerns. They were so flooded with complaints from beneficiaries about mail order that they posted a compilation of them online. Patients repeatedly lamented going days or weeks without their medication due to delays or shipments to the wrong address. Many patients reported receiving medication that they did not order and could not return. One patient complained of already having a 15-month supply on hand. “Member is concerned because she asked [mail order] not to send any more medication and they did 50 days early.”

The full Medicare complaint document is online and here is a link to our news release reacting to the complaint document.

Any willing pharmacy

Instead of being limited to mail order or steered by PBMs to a certain pharmacy, patients should be able to access discounted copays at any pharmacy that is willing to accept the insurance plan’s terms and conditions. Some patients currently face onerous trips to access discounted copays at one of their Medicare drug plan’s “preferred” pharmacies. Most of these drug plans fail to meet the government’s convenient access standard in urban areas. In less populated areas patients may have to travel 20+ miles to reach a “preferred” pharmacy.

That’s partly why the any willing pharmacy legislation (H.R. 793) has been endorsed by leading national patient advocacy organizations, including The AIDS Institute; Alliance for Retired Americans; Center for Medicare Advocacy, Inc.; Families USA; HealthHIV; Justice in Aging (formerly National Senior Citizens Law Center); LeadingAge; Medicare Rights Center; National Consumers League; National Grange; National Rural Health Association; and U.S. Pain Foundation.

The Centers for Medicare and Medicaid Services (CMS) concluded that the any willing pharmacy policy is “the best way to encourage price competition and lower costs in the Part D program.”

In fact, in recent years more Medicare drug plans have included independent community pharmacies among the ‘preferred’ options, yet overall Medicare average monthly prescription drug plan monthly premiums are at virtually identical levels. Moreover, an analysis by a leading health care economist has demonstrated that an ‘any willing pharmacy’ policy can maintain or even reduce current Medicare costs by promoting additional competition among pharmacies. (Source: analysis was prepared by economist Dr. David Eisenstadt, veteran of the U.S. Department of Justice Antitrust Division and Principal at Microeconomic Consulting and Research Associates (MiCRA)).

In addition, this policy supports local jobs and keeps more health care dollars within the community.

Many states are already taking steps and none have reported an adverse impact. For example, Pennsylvania is among the states to enact an “any willing pharmacy” law to allow patients to use a local pharmacy that is willing to accept the terms and conditions of the insurance plan’s mail order pharmacy. A new analysis of the impact of the law (Act 207) concluded that it has had no material impact in terms of increasing health insurance or drug costs. (from the report, “None of the state’s major health insurers reported incurring material cost as a result of Act 207. One noted the costs associated with implementation typically involves the provider credentialing process, which are costs incurred with or without Act 207.”)

Payers/Fiduciary responsibility

The Department of Labor ERISA Advisory Council is moving to require greater transparency and financial disclosure by PBMs in ERISA health plans. The move comes in response to testimony from payers/employers/plan sponsors who complained about difficulty in overseeing PBM activities and revenue.

Specialty pharmacies

PBM arguments in favor of limiting patients to use PBM-owned pharmacies for “specialty” drugs are anti-consumer, self-serving and ultimately about increasing their profits. (See: “Double-Digit Spike in Drug Costs Prescribes Profits for PBMs”) Research indicates that patient adherence is greater when patients have a connection with their pharmacy and that those connections are strongest at local pharmacies.


PBMs have a long history of trumpeting “studies” like this that contain alarmist warnings that are ultimately disproven whenever the underlying legislation or proposal is enacted or objectively examined. Instances of their record of repeatedly “crying wolf” are documented here.

States have taken many steps to address PBM activities, not just mail order, and are already revisiting such previously enacted laws to strengthen them to address ongoing abuses of the PBM industry. Despite the scare tactics by the PBMs, states and federal policymakers wisely continue to see the need to reign in questionable PBM practices and to support consumers and small business community pharmacies.

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