Rheumatologists Air Frustrations with Pharmacy Benefit Managers at Annual Meeting

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SAN DIEGO—Pharmacy benefit managers (PBMs) and their impact on drug prices and access to high-cost medications by the patients rheumatologists treat was a major theme at the 2017 ACR/ARHP Annual Meeting Nov. 3–8. In one session, industry experts tried to clarify the role for prior authorizations and drug formulary policies and explored ways to constructively reshape the relationship between rheumatologists and PBMs for the benefit of patients. But participants also voiced frustrations over PBM-imposed barriers to access for rheumatologic treatments. Lack of transparency on drug pricing policies for the country’s biggest PBMs remains a flashpoint for much of their frustration.

PBMs are engaged by health plans to manage their drug benefit programs, serving as third-party administrators or brokers between the manufacturer and the retailer. Originally set up to bring prescription drug utilization and costs under control, they have become very good at negotiating discounted rebates from the manufacturer’s list price. But recent industry consolidations and their resulting clout to control pharmacy costs have altered this dynamic.

The PBMs may be keeping a large part of the savings negotiated with manufacturers for themselves. PBMs also play other roles in the healthcare system, some of which may be beneficial to patients. The three biggest companies, controlling about three-quarters of the market, are ExpressScripts, CVS CareMark and OptumRx.

Dr. Worthing

Rheumatologists say PBMs negatively affect patients through the use of prior authorization requirements, spread pricing, step therapy programs that determine which drug the patient must try first, the use of specialty tiers for biologics and other high-cost medications, requiring patients to pay a percentage of the drug cost rather than just a copayment, and non-medical switching. The latter means changing the patient’s covered drug for reasons unrelated to medical appropriateness. ACR opposes non-medical switching and believes that any such medication changes should involve open discussion with the patient and physician.

All of these practices can have a huge impact on the lives of rheumatology patients. One of the biggest concerns involves the rebates charged to drug manufacturers by the PBMs. “Too often, our patients’ formularies are determined by a rebate system that incentivizes higher prices, with savings that don’t trickle down to the patient. The highest rebate is determined by the following formula: rebate equals list price times percent of rebate times market share,” explained Angus Worthing, MD, FACP, FACR, chair of the ACR’s Government Affairs Committee and a rheumatologist in practice in Washington, D.C. But because contracts between drug manufacturers and PBMs are proprietary and thus hidden from public view, it isn’t clear what’s really going on, he said.

“We are asking the CMS [Centers for Medicare & Medicaid Services] to define the key terms in the marketplace: What is a rebate? What are associated costs? If we could develop clearer definitions and more transparency on rebates, we would know more about what’s happening. We plan to go to Congress and ask them to ask the CMS for answers,” Dr. Worthing said.

Rheumatologists say PBMs negatively affect patients through the use of prior authorization requirements, spread pricing, step therapy programs that determine which drug the patient must try first …

Holding Their Feet to the Fire

One success for ACR’s advocacy strategy occurred when the Senate Committee on Health, Education, Labor and Pensions (HELP) held a second hearing on drug pricing issues Oct. 17. At the hearing, both Democratic and Republican committee members asked questions about high drug prices and the effects of rebates and called for greater transparency in PBMs’ pricing practices. “Committee members held PBMs’ feet to the fire with their questions,” Dr. Worthing said. Such hearings are critical because they help drive the national conversation about the role of PBMs.

The ACR’s Insurance Subcommittee, formed eight years ago with the purpose of coordinating activities involving health insurers that have an impact on the practice environment of rheumatologists, continues to be busy with these issues, committee chair Sean Fahey, MD, a rheumatologist with Piedmont HealthCare in Mooresville, N.C., said at the Annual Meeting. “The focus revolves around drug costs, and a lot of the concerns revolve around PBMs.”

The committee is seeing increasing interactions related to the cost of drugs and the larger role of PBMs, Dr. Fahey said. “The PBM’s whole reason for being is to make money, whether by rebates, fees or contracts, and our patients too often are caught in the middle. We’ve tried the honey approach and the vinegar approach. Hopefully, over time, we’ll blend these two and find ways to collaborate with them. We’ve tried to reach out to PBMs to be more collaborative, but it’s unclear if we’ve been able to influence policy.”

Additionally in 2017, in response to the growing, negative impacts of PBM practices, the ACR, the Coalition of State Rheumatology Organizations and several other physician and patient groups formed the Alliance for Transparent and Affordable Prescriptions (ATAP) to bring further attention to the impact of PBMs on drug pricing and access. ATAP’s goal is to address PBMs’ effects on drug prices and access to treatment.

Larry Beresford is a freelance medical journalist in Oakland, Calif.