LTC Pharmacy Advocacy Group Praises Sen. Alexander, HELP Committee Focus on Drug Pricing

DATE: June 13, 2017

Senior Care Pharmacy Coalition (SCPC) Says More Specific Focus on Entire Drug Supply Chain, Rampant PBM Abuses Will Illuminate, Inform Pro-Consumer Pricing Discussion

Washington, DC — In praising Senate Health, Education, Pension and Labor (HELP) Chairman Lamar Alexander (R-TN) and Committee members for initiating a key discussion on the rising cost of prescription drugs, and how the drug delivery system affects consumer costs, the Senior Care Pharmacy Coalition (SCPC) today urged Congress to prioritize focus not just on the entire drug supply chain, but on the increasingly controversial role of Pharmacy Benefit Managers (PBMs) — characterized in a new NBC News piece as a “middleman” engaged in opaque “backdoor” negotiations.

“We applaud Senator Alexander and the Committee for examining the increasingly contentious drug pricing issue, and we believe a careful examination of the entire drug supply chain and the pricing vagaries associated with each link on the chain will yield more determinative answers about who is accountable and transparent, and who is not,” stated Alan G. Rosenbloom, President and CEO of the SCPC, which advocates specifically for the interests of long term care (LTC) pharmacies and the elderly patients under their care in skilled nursing and assisted living facilities (SNFs/ALFs) nationwide.

“2017 has seen a significant spike in bipartisan interest surrounding the causal factors driving higher drug prices, and we encourage Senator Alexander and the Committee to ensure moving forward that PBMs are called to answer for their strident defense of opaque pricing practices that keep consumers in the dark, and under their oligopolistic thumbs,” Rosenbloom continued, noting the nation’s three major PBMs — Express Scripts, CVS Caremark and Optum Rx — now control more than 80 percent of prescription medications dispensed to patients in LTC facilities.

Rosenbloom said SCPC’s mission of educating lawmakers about opaque PBM pricing practices — and their negative impact on seniors and LTC pharmacies’ ongoing ability to provide key clinical benefits and medication management services — has been helped by an avalanche of informative coverage surrounding Anthem’s contract termination with its PBM, Express Scripts. The flood of negative headlines has served to resurrect a recent Centers for Medicare & Medicaid Services (CMS) study finding LTC and other pharmacy groups are paying increasingly larger rebates to PBMs — which then keep the money rather than translating savings into lower costs for government health care programs and consumers.

Rosenbloom also recommended appropriate reforms to achieve more PBM transparency in “rebate” and “discount” agreements — and ending rapacious post point-of-sale fees and “clawbacks” PBMs impose on consumers and LTC pharmacies. Notably, he said, an Avalere Health analysis demonstrates PBMs’ pricing methodology for LTC pharmacy generic drug reimbursement is arbitrary and capricious, raising questions about the relationship between price variation and actual market conditions.

The SCPC leader said another new study (The Economic Costs of Pharmacy Benefit Managers: A Review of the Literature) from the Pacific Research Institute’s (PRI) Senior Fellow in Business and Economics, Dr. Wayne Winegarden, finds PBMs have an undue influence over the medicines that patients can access; PBMs provide incentives for higher list prices for medications that come with large rebates and discounts; and, PBMs trigger higher patient co-pays than necessary given the large discrepancy between list prices and the prices people pay at the counter.

“We are pleased to see a growing bipartisan push in the U.S. Senate and House to affect more transparent drug pricing practices as PBMs’ façade as benevolent, pro-consumer actors in the pharmaceutical marketplace continues to crack and crumble,” Rosenbloom concluded. He noted the SCPC will soon have an announcement about its research effort aimed at further quantifying PBM reimbursement inequities driven by a Maximum Allowable Cost (MAC) pricing formula used to establish payment rates for a majority of generic drugs LTC pharmacies dispense to elderly Medicare beneficiaries.

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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 in across the country occupying approximately 675,000 beds across the country.  Visit us at www.seniorcarepharmacies.org to learn more.