National LTC Pharmacy Advocacy Group: Cigna/Express Scripts Deal Heightens Salience of Gottlieb Comments Regarding PBMs and “Rigged Payment Schemes”

DATE: March 8, 2018

Washington, DC – The Senior Care Pharmacy Coalition (SCPC) said today that health insurance giant Cigna’s agreement to buy Express Scripts represents another dangerous step towards an increasingly oligopolistic health care system, allowing a shrinking number of “mega-companies” to control every aspect of Americans’ care.

“Mega-mergers like Cigna/Express Scripts and CVS Health/Aetna heighten the salience of FDA Commissioner Gottlieb’s blast yesterday about ‘rigged payment schemes’ and ‘Kabuki drug-pricing constructs’ as rapidly accelerating vertical and horizontal integration threatens the free and fair markets that struggle to keep prices in check in the face of growing oligopolistic corporate consolidation,” observed 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.

Rosenbloom said CVS Caremark, Express Scripts and Optum Rx — the nation’s three largest PBMs – now control more than 80% of prescriptions dispensed in America. For seniors living in the nation’s long-term care (LTC) facilities, and served by LTC pharmacies, this percentage jumps to more than 90%.

Express Scripts is the second-largest pharmacy benefit manager (PBM) and the largest mail-order pharmacy chain, while Cigna is one of the largest health insurers (and Medicare Part C and Part D plan sponsors).  Policymakers in the Administration and Congress increasingly recognize that PBMs are a significant part of the problem of rising drug prices and out-of-pocket costs for consumers – not a part of the solution, as PBMs claim.

“A growing body of economists find that corporate conglomerates with significant market share among PBMs and health insurers drive sub-optimal results – higher insurance and drug costs for consumers and the wrong drug for patients,” he continued. “PBMs have badly failed in validating their value proposition in the drug distribution chain – and incorporate secrecy and deception as part of their business model. The unaccountable oligopolies they have methodically constructed are antithetical to the free-market premise of Medicare Part D.”

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 12-13 prescription medications daily – making drug prices and access to needed medications an essential variable in maintaining vulnerable seniors’ well-being.

“The bottom line is that corporate linkage between PBMs and health insurers, coupled with significant market share in either market, mean higher prices and poorer quality for real people, particularly seniors,” Rosenbloom concluded.  “The Department of Justice should protect consumers and competition by rejecting the Cigna/Express Scripts deal and the Aetna/CVS Health deal.  Americans need more affordable drugs, not greater profits for those who seek more consolidation in health care markets that already are oligopolies.”

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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.