Q: Prescription drugs are a big ticket item in American Money Driven Medicine. Since the initiation of pharmacy benefits management (PBM) in 1968, the growth and proliferation of functions of this “middle-man managed care” concept has been so successful that PBMs now control not only pricing, discounts, and drug selection for >250 million Americans, they threaten to become “the prescriber.” Is this a good thing?
A: You and I naively imagine that medical care responsibility logically devolves to the doctor who cares for the patient, diagnoses their condition, and provides accountability for management, treatment, and outcomes. Guess again. Since medicines have grown in cost and costs continue to skyrocket, profit-oriented businesses have muscled the patient and the doctor out of the way. Pharmacy Benefit Manager (PBM)’s plans now replace physician choice in many settings, and if the physician’s choice is expensive, they replace it with less expensive alternatives. These PBMs then profit from the resultant savings.
What is a Pharmacy Benefit Manager (PBM) and how did they get here? PBMs were developed to act on behalf of insurance carriers, self-insured employer plans, Medicare Part D plans, Federal Employees Health Benefits Program, and state government employee plans to maintain or reduce prescription costs while concurrently trying to improve outcomes. These “middle men” corporations are now principal players in our health care system, controlling at least 80% of drug benefits for 260 million Americans.
The initial goals that were instrumental in PBM development seem to have gone astray. The system which put PBMs in place was done with good intentions, but it has now resulted in increased cost to health plans and adverse health outcomes. PBMs restrict access by excluding products from formularies, delaying access through prior authorizations, developing step-by-step care algorithms, defining disparate pricing, and establishing lengthy and complicated paperwork. A recent study using Medicare data showed that a switch to a less expensive medication for non-medical reasons, termed as non-medical switching, leads to increased annual medical payments of $6,254 to $13,127 and a higher rate of secondary switching (this time for medical reasons) to another medication. Patient care also suffered.
Anthem health plans’ current $15 billion lawsuit against the PBM Express Scripts seeks to recover rebate funds, and Anthem’s withdrawal from its PBM raised public awareness of the lack of transparency about actual discounted costs of expensive drugs. Express Scripts is willing to accept Anthem’s withdrawal from their plan and lose 14% in sales revenues, to protect against having to share rebate dollars with health plans and their members. This lack of transparency has recently been addressed by Alan Lyles PhD of the University of Baltimore, College of Public Affairs, who questions PBM value in the healthcare system. Similarly, consumers are suing their insurers for “bait and switch” claims. This action is pressuring states to consider adopting state legislation that limits insurer’s ability to control pharmaceutical formulary decisions.
Traditionally, physicians prescribed medicines that they felt were most likely to help their patients based on clinical judgment rather than cost alone. PBMs have stepped beyond their historical role and are making formulary decisions that control access to which drugs physicians can prescribe without regulatory oversight or the benefit of clinical experience. What started as a value-based strategy, using clinical guidelines to define a stepwise process of drug selection based on best clinical evidence, yet allowing for individual case decision exceptions, has morphed into blatant cost-based guidelines selecting from a restricted list of drugs to be offered (the formulary) based on the lowest cost and highest profit to the PBM. Lowering pharmaceutical costs in the United States is essential. This must be the purview of professional societies and other healthcare patient and provider groups rather than PBMs profiting directly for every dollar saved.
From a practical perspective of the physician, the laborious prior authorization and step therapy processes used to gatekeep expensive FDA approved drugs are onerous and cost a great deal of time and effort that could be better directed to patient care. This modus operandi also leads directly to inordinately high copays for PBM non-preferred drugs, further influencing decisions without any responsibility or accountability for patient care. Authority without responsibility is an extremely bad practice which will lead to a range of bad outcomes. In essence, the PBM has become the physician without training, knowledge, medical license, or knowledge of the individual and their illnesses.
PBMs have adopted new approaches to control formularies and, thereby drug costs. They remove an existing and generally well-tolerated drug on a formulary and replace it with another less expensive and less validated drug because of better pricing for the new, now “preferred” drug (non-medical switching). This is particularly worrisome for oncology, as biosimilar trastuzumab and biosimilar rituximab are expected to enter the US market soon. It’s possible that PBMs may switch out branded rituximab and trastuzumab despite the absence of a proven 20-year safety history. Similar concerns apply to persons with a range of complex medical illnesses, such as diabetes. Because of the possible absence of drugs’ proven effectiveness, non-medical switching has potentially important and adverse implications for both the patient and their doctor.
Dr. Elaine Nguyen, a Health Economics and Outcomes Research Fellow at Hartford Hospital, applied macro-analysis to multiple studies looking at the broader implications of non-medical switching on patient clinical and economic outcomes, healthcare utilization, and medication-taking behavior. The study found that non-medical switching is associated with significantly more negative effects upon care than benefits, and negative care effects were even more substantial when non-medical switching occurs among patients who are stable and doing well on their current treatment regimens.
This practice is especially damaging to patients with diabetes, as diabetes is a complex progressive disease. Diabetes requires self-management skills and a positive working doctor-patient relationship. The condition also needs continual fine-tuning of medication, formulation of a diet and exercise regimen, and attending to diabetes-related stress. When non-medical switching is required, it is disruptive to an individual’s current management routine.
The solution to the problem requires a concerted effort among those most impacted (patients and providers), encouragement of conversations, and collaborative problem-solving. Physician and patient groups have begun to work together to voice concerns about PBM practices and to advocate for action. PBMs could help by having a streamlined, universal Prior Authorization process (as supported by the AMA Coalition), publishing coverage policies consistent with the insurer’s medical benefit policies, and providing a list of alternative options when a prescribed option is not available. Coalitions have worked for state legislation to define step therapy and prior authorization but many states still need legislation. Physicians and patients can increase communication with employers, providing details about the impact of their PBM policies on workers. In addition to discussing the interference with disease control and function, the details should also include the topics of worker productivity, absenteeism, and decreased attentiveness when at work to encourage better decision-making when selecting insurers and PBMs. The ultimate goal is to position the physician as the ultimate authority on patient care once again.
As Dr. Seth Baum, CMO of Excel Medical Clinical Trials, eloquently expressed: “What is the cost, and the value, of a life? How do we measure this intangible and all-important metric? I can’t answer this question. I can tell you though that withholding medications from those who might benefit would exact a price I’m unwilling to pay: my personal ethos and professional integrity.”
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