Proponents of policies targeting pharmacy benefit companies ignore the costly repercussions of undermining pharmacy benefit managers’ (PBMs) ability to secure savings that enable health plan sponsors to offer quality, affordable prescription drug benefits.

Proposals being pushed to “lower drug costs” that do not address the anti-competitive practices of Big Pharma – which are the root cause of high prices – would do nothing to achieve lower costs.

There is a reason Big Pharma supports anti-PBM policies: because they stand to reap higher profits at the expense of patients, plan sponsors and the health care system.

Let’s take a look at the facts:

Delinking Raises Costs for Patients, Taxpayers and Plan Sponsors: ‘Delinking’ pharmacy benefit companies from being able to share in the savings they negotiate on behalf of health plan sponsors, will only raise costs. In fact, an analysis from Casey Mulligan, Ph.D., University of Chicago Professor of Economics, found Medicare premium costs would rise $13 billion annually if the ‘delinking’ were applied to the Medicare Part D program. In this ‘delinking’ state, drug companies would see an additional $10 billion in increased drug profits.

If applying ‘delinking’ in the Medicare program wasn’t costly enough, efforts to push this policy to the commercial market would increase health care premiums by $27 billion every year while rewarding Big Pharma with $22 billion, according to Alex Brill, founder and CEO of Matrix Global Advisors (MGA).

Further, ‘delinking’ would undermine rebates that are uncorrelated to high drug prices and used by health plan sponsors to the benefit of their employees. An analysis using Centers for Medicare and Medicaid Services (CMS) data of the top 250 brand-name drugs in Medicare Part D confirmed that price increases from big drug companies are unrelated to rebates.

According to the United States Government Accountability Office (GAO), 99.6 percent of rebates are passed directly to Medicare Part D plans, and according to The Pew Charitable Trusts, 91 percent of rebates are passed to other health plan sponsors, like employers and unions, who use those savings to help patients, including by lowering premiums, reducing cost-sharing at the pharmacy counter or providing more comprehensive benefit offerings.

A recent national survey of more than 700 employers from The Coalition for Affordable Prescription Drugs (CAPD) found that 90 percent of employers who receive rebates from PBMs use those rebates to the benefit of employees, including lowering employee spending on benefits and enhancing coverage. Find out more about the negative consequences of passing ‘delinking’ proposals targeting pharmacy benefits HERE.

Eliminating Spread Pricing Takes Away Employer Choice: Also referred to as a risk mitigation model, spread pricing provides employers and other health plan sponsors with cost predictability by giving them a price-certain for prescription drug benefit payments to pharmacies. Every employer has different goals and needs: some prefer predictability, some value cash flow, while others prioritize visibility into discounts negotiated on their behalf. For many small and mid-sized businesses, that means having the option to choose spread pricing and the predictability of fixed pricing for drugs dispensed by pharmacies is what works best for them and their employees. Proposals eliminating spread takes away one of the choices health plan sponsors have when designing their prescription drug benefit. Learn why employers value spread pricing HERE.

Learn more about the role and value of pharmacy benefit companies and how Big Pharma’s anti-competitive practices are the root cause of high drug prices HERE.

###

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