PBMs: Clinton’s Rx Plan Could Shine Spotlight on Deals
In calling for Medicare coverage of prescription drugs, President Clinton's proposal stands not only to bolster business for pharmacy benefit management (PBM) companies but also to bring to light "some practices that have largely escaped public notice," the New York Times reports. Working behind the scenes to secure deep discounts for large employers and health plans, PBMs "have not engendered widespread hostility among consumers, as some HMOs have," even though they rake in kick-backs from pharmaceutical manufacturers and encourage doctors to use lower-priced drugs. Under the Clinton plan, however, the tactics may come to light as PBMs train their efforts on behalf of Medicare patients. "We think we could play a useful role in Medicare," said Express Scripts Inc. President Barrett Toan, adding, "Many elderly patients are paying prices 20% to 25% higher than what our customers pay because they don't get the type of discounts we can negotiate." Although Toan refused to "give the details of its contracts with drug manufacturers and pharmacies," Congress and the public would likely "insist on knowing the details of any discounts negotiated on behalf of Medicare patients." The Comptroller General would audit Medicare drug spending, Medicare officials would attempt to regulate PBMs and "pharmacists would demand an explanation if they were excluded from the list of drugstores serving Medicare beneficiaries."
Very Special Interests
Folding PBMs into the Medicare equation would spark questions of whether drugs are chosen for their efficacy or for their hefty rebates, the Times reports. John Rector, general counsel of the National Community Pharmacists Association, said that preferences for certain drugs often arise from "back-room deals that the consumer never knows about." For example, he said, a PBM might instruct a pharmacists to "dispense a more expensive, inappropriate brand-name drug because the PBM is getting a rebate or kick-back from the manufacturer." And the perceived conflict becomes only more pronounced for PBMs owned by pharmaceutical companies. Nonetheless, Howard Bedlin, vice president of the National Council on the Aging, said, "There's an emerging consensus that pharmacy benefits managers have an important role to play in Medicare reform, but you have to build in certain consumer protections" (Pear, 7/13).