Pharmacy Benefit Managers Are Not to Blame for Rising Drug Prices
While home during their August recess, members of Congress are likely to hear from constituents about a wide range of challenges they’re facing. At the top of many constituents’ lists will be complaints about therising price of prescription drugs.
And for good reason. In just the first month of 2023, drug companies raised the price on more than 1,000 drugs, and the median list price for a year’s supply of a new brand-name prescription drug has skyrocketedfrom just over $2,000 in 2008 to $180,000 in 2021. It’s no surprise that a survey conducted this year found that “a quarter of voters report that they and/or a family member have had financial difficulty affording a prescribed medication.” An overwhelming majority of those voters polled also support policies to hold Big Pharma accountable to lower drug prices.
Yet, over the past several months, Congress has chosen to pursue “drug-pricing legislation” that does nothing to address prices and instead singles out pharmacy benefit companies, the one part of the supply chain that serves as the only real check against the pricing power of big drug companies. Seven different committees have held a total of nine hearings and eight markups on pharmacy benefit companies so far this year, with very few focused on the root cause of high drug prices: pharma’s price-setting. Policymakers are missing themark.
Earlier this year, drug manufacturers announced their decision to lower list prices on certain insulin products, a decision for which pharmacy benefit companies have advocated. Pharma should not stop there; we’re asking them to lower prices across therapeutic areas. It’s past time to do the right thing to bring down prices and improve patient access to needed medications.
While we wait for pharma to come around, pharmacy benefit companies will keep doing their work: saving patients more than $1,000 per year by negotiating with drug companies to secure discounts off list prices. That translates into nearly $145 billion in savings annually, saving employers 40–50% of their annual drug and related medical costs that they would pay without a pharmacy benefit company.
Pharmacy benefit companies will continue to deploy their clinical expertise to help patients stay on their medications. They work to improve patient safety and care, from checking the patient’s medication history for any errors and possible harmful drug interactions to verifying insurance and cost sharing at the pharmacy counter. The goal is to ensure that Americans get their prescriptions as seamlessly as possible.
Pharmacy benefit companies will innovate to meet the evolving needs of employers and other plan sponsors who want to provide affordable benefits. With 73 full-service pharmacy benefit companies operating in theU.S., they compete all the time to serve the unique situations of businesses, unions and government entities that represent more than 275 million Americans.
The August recess may provide an opportunity for lawmakers to consider which entities in the supply chain control pricing decisions and which ones — the PBMs — actually act as a brake on costs. When Congress returns to the Capitol, lawmakers should ask the fundamental question: Is the legislation under consideration actually going to lower prescription drug prices?
Were Congress to focus on that, lawmakers could have a meaningful impact on prescription drug prices. For starters, lawmakers could address the anti-competitive practices that drug companies have used to hinder new medications from coming to market, including patent abuse tactics that maintain monopolies, pay-for-delay deals that effectively block more affordable generic drugs, and overly long exclusivity periods for biologics and orphan indications that stifle competition.
Even more, lawmakers could promote competition by cutting the red tape that makes it difficult for biosimilars and generics to enter the market.
In short, there are plenty of areas where Congress can focus to deliver real savings for Americans at thepharmacy. But focusing solely on the one entity that aims to drive down costs for prescription drugs is misguided.
Let’s make this summer the last one where Americans struggle with affording their prescription drugs. We would all be well served if members of Congress listened to their constituents’ worries about prescription drug prices and made the real “drug-pricing legislation” a priority when they return to Washington in September.
Even better, instead of looking to Congress, drug companies could step up to address the root cause of theaffordability challenge, simply lower their prices, and do the right thing for patients.
