SAN DIEGO—Pharmacy benefit managers (PBMs) pose an alarming barrier to access to patients’ medications, in a system full of incentives that drive prescribing of more costly treatments, a rheumatologist and advocate for prescribing transparency said at ACR Convergence 2023.
“They really have almost complete control over what we can prescribe, by creating formularies and influencing every other player that comes into the space of prescribing medications for our patients with inflammatory diseases,” said Robert Levin, MD, president of the Alliance for Transparent & Affordable Prescriptions (ATAP) and a rheumatologist with a private practice in Clearwater, Fla.
In a session on Challenges in Access to Care, Dr. Levin and others spoke about common payer practices and policies that rheumatologists must navigate to secure and maintain appropriate care for their patients.
PBMs are nearly “one and the same” as insurers, Dr. Levin said, because the largest are owned by or associated with insurance companies, and PBMs control 80% of the prescriptions that are run through insurance companies in the U.S.
“There are three of them,” Dr. Levin noted. “It’s an oligopoly, and it controls so much.”
The supply chain of medications includes a number of points at which PBMs exert control in ways that can impair access, he said. Plan-sponsored pharmacies are favored by PBMs because the PBMs own the pharmacy, he said. In addition, drug manufacturers have no choice but to interact with PBMs because the PBMs control market access through “rebates”—essentially, fees—paid to the PBMs. The rebates are determined in a kind of secret auction in which one manufacturer doesn’t know what the others are offering for rebates. They are based on a drug’s list price and market share, or number of prescriptions. Therefore, PBMs have an incentive to get higher cost medications onto formularies, Dr. Levin said.
“The manufacturers are basically in a pay-to-play situation, and that’s a big problem,” he said.
PBMs profit from what is known as spread pricing, the difference between what the PBM charges a health plan for a drug and what the PBM reimburses the pharmacy for dispensing it. These amounts are not made known, allowing PBMs to capitalize on this lack of transparency and collect the spread.
Some states are requiring that PBMs disclose rebate amounts and have banned spread pricing, but problems persist, Dr. Levin said.
Challenges with Prior Authorization
Some pharmacies are pursuing their own ways to navigate the challenges presented by PBMs. For example, they may consider what the drug costs to manufacture, add a fee and use that as the basis for the patient price, without needing to go through insurance.
“It’s pretty exciting to see what the market-based solutions might be,” Dr. Levin said.
But things get more complicated when you add in other requirements. Prior authorizations, for one, have become an increasingly time-consuming process, said Wendy Ramey, BSPharm, RPh, a specialty pharmacist at the University of Kentucky.
“Everything needs prior authorization, it seems,” she said. “I had a prednisone prior authorization last month—believe it or not.”
She, too, discussed concerns about PBMs’ “opaque and complex” rebate arrangements and requiring providers to “choose one medication over another just for the sole purpose of the PBM making more money.” At her center, the preference is to use certolizumab for women of child-bearing age with rheumatic disease. But one Kentucky insurance plan won’t allow use of the drug until a woman is pregnant or has failed to respond to every other treatment on every level of the formulary, she said.
To make the prior authorization process run more smoothly, she said, it’s important to stay up to date on insurers and their preferred agents. She also stressed being prepared with the detailed clinical information on why a particular agent is requested—the ideal, she said, is to put all of this information into every single visit note, with all of the medications a patient has tried and when. Also, avoid using paper submissions and stick with electronic submissions, she said.
When you get a denial, the options include changing regimens, doing a peer-to-peer review, submitting an appeal and using manufacturer bridge or patient assistance programs.
“All of them work,” she said. “We’ve used all of these in different scenarios with great success.”
State Legislature Roles in Pricing
Brian Henderson, director of state government affairs with Hart Health Strategies, a consulting and lobbying firm, outlined three issues affecting patients and physicians that are getting attention in state legislatures.
One is white bagging, in which health insurance companies and PBMs are requiring that physicians get medications through a specialty pharmacy rather than through traditional buy-and-bill means. Some states are banning this practice, and others have proposed legislation, Mr. Henderson said.
Another is prescription drug affordability boards. An appointed board reviews drug affordability and, if a drug is deemed unaffordable, sets an upper price limit. The problem, Mr. Henderson said, is that these limits don’t include the reasonable costs that go into administering these drugs. “They do not understand that you are also paid for the overhead that goes into administering the drugs that you furnish in your office,” he said. “You need to be weighing in with state legislators.”
A similar issue is maximum fair price, in which prices set under the federal Inflation Reduction Act are used as a cap for reimbursement that providers can seek. Again, Mr. Henderson said, these federal limits don’t consider administration payment or other payments related to furnishing the medication.
There also have been hiccups with gold cards, or exemptions from prior authorization requirements for physicians who have exemplary track records for getting approvals of their medications.
One of the challenges is that, while a physician might be exempt from prior authorization, they are still obligated to follow step therapy rules—“so you’re left in this weird space where you have to follow the protocol, but you’re exempted from the means by which they enforce the protocol.” This is an issue that needs to be resolved, he said.
Another snag is that it is proving to be difficult to obtain gold cards for medications, because physicians need to have a minimum number of cases with that particular drug in a particular health plan—a threshold that can be hard to reach.
Mr. Henderson emphasized how important it is for physicians to make themselves heard by state legislators. For the most part, he noted, “they don’t understand the diseases you treat, they don’t understand your businesses.”
Is your practice facing a challenging payer issue? The ACR has staff dedicated to payer advocacy and practice support, and the ACR’s Insurance Subcommittee is ready to assist members with individualized support on policy and reimbursement issues. ACR/ARP members who need assistance are encouraged to complete the health plan complaint form or write to [email protected]. Additional resources are also available at ACRInsuranceAdvocacy.org.
Thomas Collins is a freelance medical writer based in Florida.
