SCPC Applauds FDA Commissioner Gottlieb’s Comments Saying PBMs Complicit in “Kabuki Drug-Pricing Constructs” and “Rigged Payment Scheme”

DATE: March 7, 2018

Washington, DC — The Senior Care Pharmacy Coalition (SCPC) today praised Federal Drug Administration (FDA) Commissioner Scott Gottlieb’s pointed comments at an annual conference of health insurers in which he charged that pharmacy benefit manager (PBM) middlemen are complicit in “Kabuki drug pricing constructs” that expose consumers to high costs and discourage needed competition.

“SCPC strongly supports Commissioner Gottlieb’s comments today, and he is simply speaking the truth about PBM duplicity and deception at a time when consumers, lawmakers and regulators are demanding answers about high drug cost culpability,” stated Alan G. Rosenbloom, President and CEO of SCPC, the only Washington-based organization exclusively representing the interests of long-term care (LTC) pharmacies and the patients they serve.

“Commissioner Gottlieb is precisely correct that consumers shouldn’t have to pay more when the primary purpose is to help subsidize rebates paid to a long list of supply chain intermediaries,” Rosenbloom continued.

The FDA Commissioner noted that the top three pharmacy benefit managers — CVS, UnitedHealth Group Inc. and Express Scripts — control more than two-thirds of their market while Rosenbloom noted that for seniors living in the nation’s long term care (LTC) facilities, and served by LTC pharmacies, this percentage jumps to more than 90 percent.

Rosenbloom said the oligopolistic, anti-competitive environment and preponderance of new PBM “pharmacy fees,” “payment adjustments,” and other clawbacks imposed on LTC pharmacies have accelerated dramatically in just the past few years, and ultimately have a negative impact on seniors. These practices have rightfully drawn fresh scrutiny from the Centers for Medicare & Medicaid Services (CMS).

“Any 21^st Century business model premised upon hiding facts from consumers and claiming it their right to make secret deals behind closed doors is, and should be, a target for federal reform,” Rosenbloom concluded. “PBMs — like other links in the supply chain — must justify their existence to the consumers who depend upon them, and to taxpayers who fund Medicare.”

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The SCPC is the national association for independent LTC pharmacies. Our member pharmacies provide care and services to patients in LTC facilities across the country occupying approximately 675,000 beds. Visit seniorcarepharmacies.org  to learn more.