In case you missed it, JC Scott, president and CEO of the Pharmaceutical Care Management Association, discusses how recent proposals being considered by Congress targeting pharmacy benefits would increase health care costs at a time when premiums continue to rise in a new op-ed published in RealClearHealth.He writes:

“As we enter the stretch run for 2023, a recent survey from KFF should serve as a stark warning for misguided legislation that purports to lower prescription drugs.

The KFF survey found that the average cost of health care premiums for employer-sponsored health insurance increased seven percent from last year – driven by inflation and an increase in post-pandemic costs of care. The increase in commercial market premiums is concerning, but there is a strong possibility that costs could be further exacerbated if Congress continues to pursue so-called PBM reform legislation.”

Scott highlights various expert analyses that found so-called “delinking” legislation would actually increase premiums and reward drug companies with increased profits:

“A new analysis by health policy researcher Alex Brill examined one proposal known as “delinking” in the commercial market that would completely undermine market-based incentives for PBMs to achieve savings, while taking choice and flexibility away from employers in deciding how to contract for PBM services. It found that implementing “delinking” in the commercial market would increase premiums for Americans by as much as $26 billion. Most of that increase – up to nearly $22 billion according to the analysis – would go directly to increasing drug company profits. 

“For the Medicare program, another analysis from University of Chicago Economist Casey Mulligan examined “delinking” in the Medicare Part D program and found that the policy would cost patients and payers up to $18 billion annually in increased premiums and higher taxes.”

He also notes a new JAMA paper that affirms misguided policies targeting pharmacy benefit companies would weaken negotiating power against Big Pharma and undercut savings:

“A recent JAMA article echoed a similar caution, as a team of professors examined proposed policy reforms and cautioned, “without incentives tied to rebate negotiation or reducing pharmacy payments, administrative fee-based contracting may not generate the same amount of savings to the plan sponsor.”

The authors further concluded that pending legislation may be misguided, writing “it is important to distinguish between market failure problems that require regulatory intervention vs initiatives that are designed to serve the financial interests of other market participants (eg, pharmacies, pharmaceutical manufacturers).” 

Scott concludes by urging Congress to instead focus on the root cause of high prescription drug prices by cracking down on Big Pharma’s anti-competitive tactics that allow them to hike the price of drugs to help boost their bottom line:

“Instead, we urge lawmakers to focus on curbing the egregious anti-competitive tactics of drug companies that are increasing the cost of health care for patients, ensuring drugs can compete fairly, promoting generic and biosimilar competition, and supporting a competitive Medicare Part D prescription drug market. Our industry stands ready to support in any way we can to help Congress enhance competition and enable pharmacy benefit companies to further drive down drug costs.”

Read the full op-ed HERE.

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See a recent op-ed from former U.S. Senator of Pennsylvania Pat Toomey cautioning lawmakers to oppose proposals that will undermine the free market HERE.

Learn more about what health policy researchers Alex Brill and Casey Mulligan had to say on the costly implications of “delinking” legislation HERE.

Read why Joe Grogan, visiting senior fellow at the USC Schaeffer Center and former domestic policy adviser under the previous administration, is also sounding the alarm over “delinking” legislation HERE.

See PCMA’s guide to understanding the role and value of pharmacy benefit companies HERE.

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PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients. Learn more at www.pcmanet.org