Published by Morning Consult
From the standpoint of the widening national debate on drug pricing issues, 2017 was a watershed year. Among the most significant developments was the pharmaceutical industry’s massive, successful effort to redirect the discussion and subsequent congressional scrutiny away from themselves, and towards the shadowy pharmacy benefit managers — middlemen who, for years, have operated out of sight, reaping billions, gouging consumers, and deceiving lawmakers.
While there is nothing unusual in Washington advocacy or politics about the time-honored tactic of pointing the finger elsewhere while facing questions about one’s own actions, Pharma’s effort has had an ancillary pro-consumer benefit of shining new light on the drug distribution chain itself. While the drug industry surely remains on lawmakers’ and regulators’ radar, the byzantine distribution chain and the myriad of players along it now have their own questions to answer.
In 2018, no player along the drug distribution chain faces a bigger challenge validating their legitimacy and value proposition than PBMs, who have quietly and patiently transformed themselves into a classic oligopoly. CVS Caremark, Express Scripts and Optum Rx — the nation’s three largest PBMs — now control more than 80 percent of prescriptions dispensed in America. For seniors living in the nation’s long-term care facilities, and served by LTC pharmacies, this percentage jumps to more than 90 percent.
LTC pharmacies, a distinct subset within the pharmacy community, serve a specialized population of elderly patients in skilled nursing centers, assisted living and other residential settings. The typical patient suffers from multiple chronic conditions, significant impairments in daily living activities, mild to moderate dementia, and takes 8-9 prescription medications daily — making drug prices and access to needed medications an essential variable in maintaining vulnerable seniors’ well-being.
Indeed, more than 60 percent of hospital readmissions from nursing centers involve medication issues. Effective oversight and ready access to medications as part of a patient’s clinical care is the single most important factor in reducing hospital readmissions and associated costs. PBM consolidation and drug market manipulation is detrimental to an already precarious LTC pharmacy balancing act caused by far greater federal and state regulatory compliance compared to more familiar retail pharmacies.