March 5, 2019

(Washington, D.C.) — As drugstore lobbyists descend on Albany today, it is important to highlight how pharmacy benefit managers (PBMs) advocate for consumers and health plan sponsors in the fight to keep prescription drugs accessible and affordable. It is equally important to understand the independent drugstore lobby’s agenda will increase prescription drug costs on the backs of New York’s consumers and health plan sponsors, the Pharmaceutical Care Management Association (PCMA) said today.

“PBMs are the primary advocate for consumers and health plans in the fight to keep prescription drugs accessible and affordable. PBMs negotiate on behalf of consumers, and work to keep a lid on overall costs for prescription drugs with market-based tools that encourage competition among drug manufacturers and pharmacies, and incentivize consumers to take the most cost-effective and clinically appropriate medication.

By leveraging competition among drug manufacturers and drugstores, PBMs save patients and health plans $123 per brand prescription, and will negotiate prescription drug costs down $654 billion nationwide over the ten years ending 2025, and nearly $40 billion in New York.

The independent drugstore lobby is promoting costly new government health mandates proposed in Governor Andrew Cuomo’s budget that will increase prescription drug costs in New York. The budget’s proposal to grant the Department of Financial Services new and expansive oversight authority, with unlimited discretion to disclose proprietary financial information could cost the state $3 billion over 10 years.

Unfortunately, the budget proposal does nothing to address the root cause of high drug costs: high list prices that only the drug manufacturers have the power to set.

The independent drugstore lobby also is pushing a recent report that inaccurately portrays PBMs’ role in the state’s Medicaid program. The report suffers from several methodological flaws, including using inaccurate pharmacy reimbursement data.  Also, the report is far from representative of the state’s pharmacies. New York has approximately 4,800 retail community pharmacies, while 44 percent of New York’s pharmacies are retail chain pharmacies, all were excluded from the report. Instead, the report used a very limited sample of independent pharmacies.

In addition, criticisms of “spread pricing” contracts are also misguided. The concept of spread pricing is not unique to the PBM contracts, and the health plan, as the purchaser of the PBM services, has the final say on the type of compensation terms.

While independent drugstores continue to push for higher reimbursement rates, their business is excelling in New York. In fact, from 2010 to 2018, the number of independent pharmacies increased by 26 percent (from 2,185 to 2,757). During the same period, chain drugstores experienced a 4.8 percent decrease.

The New York legislature should avoid enacting legislation that increases prescription drug costs for New York’s consumers.”