PBM's... an unregulated industry (at least in most states -- including Ohio)
Consumers Deserve More Choice, Protection When It Comes to Health Care http://www.drugnewswire/14128/
March 23, 2007 - 12:15 PM
By DrugNewswire
March 23, 2007 - 12:15 PM
By DrugNewswire
Pharmacy Group Testifies Before State Legislators to Increase Patient Protections, Regulate Giant Pharmacy Benefit Managers
ALEXANDRIA, Va. March 1 /PRNewswire-USNewswire/ -- In an effort to establish standards and provide better protection for patients, a representative from the National Community Pharmacists Association (NCPA) testified today before a committee of state legislators in support of model legislation that would force pharmacy benefit managers (PBMs), the largely unregulated corporations that administer the prescription drug benefit portion of health insurance plans for employers and unions, to end their deceptive business practices.
Reginia G. Benjamin, Esq., director of government affairs for NCPA, testified before the National Conference of Insurance Legislators' (NCOIL) Health, Long-Term Care, and Health Retirement Issues Committee in support of the Model Act Regarding Pharmacy Benefit Managers. The act would, among other things, require PBMs to pay pharmacy claims within 15 days, provide transparency regarding financial and drug utilization information, disclose incentives received for making drug substitutions, and pass on to the plan sponsors any rebates, payments, or benefits received from drug manufacturers. Currently, PBMs receive billions of dollars in rebates from drug manufacturers each year in return for dispensing higher-cost brand-name drugs but keep the majority of those rebates instead of passing them along to their clients.
"These drug 'middlemen' restrict consumers' choice and frequently and purposely switch patients to drugs that earn them higher rebates, even when cheaper and therapeutically similar or identical generic drugs are available," said NCPA President John Tilley, RPh, a pharmacy owner from Downey, Calif. "PBMs are robbing America's already strained health care system as a result of a lack of regulatory oversight, and that needs to change."
In addition to switching patients to medications that earn higher rebates, PBMs also limit patient treatment options by offering shrinking and shifting formularies, the lists of drugs that are covered for specific groups in a health insurance plan. PBMs often require excessively burdensome pre- authorization requirements in order to obtain refills or formulary-restricted medications, resulting in red tape and sometimes discouraging patients from trying to obtain their medications.
In most states, the business activities of PBMs are unregulated and unmonitored, in spite of numerous investigations into deceptive and anticompetitive business practices. PBMs regularly have faced litigation related to the federal False Claims Act, antitrust and unfair competition, deceptive practices, and their roles as fiduciaries. Some of those who have sued the PBMs include state attorneys general, unions and health plans, and the United States Department of Justice.
Reginia G. Benjamin, Esq., director of government affairs for NCPA, testified before the National Conference of Insurance Legislators' (NCOIL) Health, Long-Term Care, and Health Retirement Issues Committee in support of the Model Act Regarding Pharmacy Benefit Managers. The act would, among other things, require PBMs to pay pharmacy claims within 15 days, provide transparency regarding financial and drug utilization information, disclose incentives received for making drug substitutions, and pass on to the plan sponsors any rebates, payments, or benefits received from drug manufacturers. Currently, PBMs receive billions of dollars in rebates from drug manufacturers each year in return for dispensing higher-cost brand-name drugs but keep the majority of those rebates instead of passing them along to their clients.
"These drug 'middlemen' restrict consumers' choice and frequently and purposely switch patients to drugs that earn them higher rebates, even when cheaper and therapeutically similar or identical generic drugs are available," said NCPA President John Tilley, RPh, a pharmacy owner from Downey, Calif. "PBMs are robbing America's already strained health care system as a result of a lack of regulatory oversight, and that needs to change."
In addition to switching patients to medications that earn higher rebates, PBMs also limit patient treatment options by offering shrinking and shifting formularies, the lists of drugs that are covered for specific groups in a health insurance plan. PBMs often require excessively burdensome pre- authorization requirements in order to obtain refills or formulary-restricted medications, resulting in red tape and sometimes discouraging patients from trying to obtain their medications.
In most states, the business activities of PBMs are unregulated and unmonitored, in spite of numerous investigations into deceptive and anticompetitive business practices. PBMs regularly have faced litigation related to the federal False Claims Act, antitrust and unfair competition, deceptive practices, and their roles as fiduciaries. Some of those who have sued the PBMs include state attorneys general, unions and health plans, and the United States Department of Justice.
In her testimony before the committee, Benjamin cited a number of recent settlements and judgments against PBMs, including more than $378 million, not including interest, paid by two of the largest PBMs between 2004 and 2006 in cases involving deceptive business practices.
"In our view, these settlement amounts represent health care dollars," Benjamin testified, "dollars that could have been spent to provide health care to covered persons and lower the cost of the prescription drug benefit for employers."
The model act is sponsored by NCOIL member Harvey Morgan, a state delegate and a retired pharmacist from Gloucester, Va. NCOIL is composed of state legislators whose main area of public policy concern is insurance legislation and regulation and who are members of the committees responsible for insurance legislation in their respective state houses across the country.
If adopted by NCOIL, the model bill could be introduced by NCOIL members in their respective state legislatures.
Currently, eight states have enacted laws regulating PBM operations. The most comprehensive regulation to date is found in the Maine law. Despite repeated efforts to overturn the law by the Pharmaceutical Care Management Association (PCMA), the lobbying group that represents seven giant PBMs, every court has upheld Maine's right to regulate PBM business activities.
"These sorts of 'transparency' statutes protect both employers that provide drug benefits for employees and retirees, as well as consumers themselves, who pay the premiums," said NCPA Executive Vice President and CEO Bruce Roberts, RPh. "Every state should have the right to exercise its authority to provide a level of oversight of the PBM industry in an attempt to protects its consumers from PBMs' abusive practices."
"In our view, these settlement amounts represent health care dollars," Benjamin testified, "dollars that could have been spent to provide health care to covered persons and lower the cost of the prescription drug benefit for employers."
The model act is sponsored by NCOIL member Harvey Morgan, a state delegate and a retired pharmacist from Gloucester, Va. NCOIL is composed of state legislators whose main area of public policy concern is insurance legislation and regulation and who are members of the committees responsible for insurance legislation in their respective state houses across the country.
If adopted by NCOIL, the model bill could be introduced by NCOIL members in their respective state legislatures.
Currently, eight states have enacted laws regulating PBM operations. The most comprehensive regulation to date is found in the Maine law. Despite repeated efforts to overturn the law by the Pharmaceutical Care Management Association (PCMA), the lobbying group that represents seven giant PBMs, every court has upheld Maine's right to regulate PBM business activities.
"These sorts of 'transparency' statutes protect both employers that provide drug benefits for employees and retirees, as well as consumers themselves, who pay the premiums," said NCPA Executive Vice President and CEO Bruce Roberts, RPh. "Every state should have the right to exercise its authority to provide a level of oversight of the PBM industry in an attempt to protects its consumers from PBMs' abusive practices."
The National Community Pharmacists Association, founded in 1898, represents the nation's community pharmacists, including the owners of more than 24,000 pharmacies. The nation's independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation's retail prescription medicines.
Source: National Community Pharmacists Association
Source: National Community Pharmacists Association
CONTACT: Robert Appel, Senior Vice President, Communications, of National Community Pharmacists Association, +1-703-838-2682, bob.appel@ncpanet.org
posted by Kathie Bracy at 4:24 PM
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