New Anthem PBM Serviced by CVS Perpetuates Oligopolistic, Anti-Consumer Shell Game

DATE: October 20, 2017

Senators Alexander and Murkowski Express Frustration with Overly Complex Drug Pricing System

Washington, DC — Commenting on health insurer Anthem’s announcement that it will launch its own “in house” pharmacy benefit manager (PBM) to be managed by CVS Health Corp., the Senior Care Pharmacy Coalition (SCPC) said the development represents a perpetuation of the oligopolistic, anti-consumer shell game.

“By their very design and intent, these relationships are a shell game premised upon keeping consumer, lawmaker and regulator alike in the dark about virtually every aspect of the mysterious ‘negotiations’ and ‘rebates’ we hear about — but never see,” said Alan G. Rosenbloom, President of SCPC, the only federal advocacy organization devoted exclusively to the interests of the nation’s LTC pharmacies and the patients they serve.

Anthem sued its existing PBM, Express Scripts, for overcharging on prescription drugs over several years, charging that Express Scripts was getting an “obscene profit windfall” from overcharging the insurer.

At Tuesday’s Health, Education, Labor and Pensions (HELP) Committee regarding the prescription drug distribution chain and its impact on patient costs, Chairman Lamar Alexander (R-TN) and Senator Lisa Murkowski (R-AK) expressed bewilderment about pricing determinations, systemic complexity and the ongoing mystery surrounding rebates.

It was noted at the hearing that sometimes the payments drug manufacturers make to PBMs are passed on to insurers, and sometimes insurers pass on to patients the savings from those rebates — but that the amount of those payments are kept secret.

“I have yet to figure out where [the money] goes,” Alexander said. For her part, Murkowski said, “Even those of us that are listening to you as supposed experts, it’s all Greek, and we’re not doing anything to help the consumer.” (STAT 10/17/17) 

Rosenbloom thanked Alexander and the HELP Committee for continuing its examination of drug pricing, and expressed hope there will be a third hearing on this critical health and public policy issue.

“Absent thoughtful, systematic, sustained evaluation of the complex strands that inextricably link the drug supply chain and PBM pricing methodologies, policymakers cannot accurately identify the causes of problems and concerns, and will be unable to craft real and lasting solutions,” Rosenbloom continued.