LTC pharmacy group rips Medicare Part D ‘oligopoly, corrupting the free market,’ offers 7 fixes

DATE: July 18, 2018

Published by McKnight’s

One of the leading groups representing long-term care pharmacists is urging the federal government to “act swiftly” to address “skyrocketing drug costs” that are harming the field.

Those comments came Monday, in a letter submitted to the head of the Department of Health and Human Services, as the Trump Administration looks for ways to address ballooning drug costs.

The Senior Care Pharmacy Coalition — which says it represents about 75% of independent long-term care pharmacies, serving some 750,000 residents — offered several suggestions on how the feds can begin to address surging prices. Pharmacy benefit manager concentration, along with consolidation in the healthcare system and drug supply chain, have turned Medicare Part D into an “anti-competitive and oligopolistic marketplace,” dominated by just a few players, SCPC officials said.

“We are grateful for the administration’s initiative in tackling the significant national problems created by skyrocketing drug costs and out-of-pocket expenses for consumers,” Alan Rosenbloom, president and CEO of the pharmacy coalition, wrote in his letter to HHS Secretary Alex Azar. “We urge HHS to act swiftly in developing and implementing a comprehensive set of solutions that address the underlying market conditions as well as the onerous manifestations of those conditions. Putting American patients first demands such action.”

In particular, CVS Health, ESI and UnitedHealth dominate an “increasingly concentrated” segment of the drug supply chain, with their three affiliated pharmacy benefit managers processing almost 90% of all prescriptions for long-term care pharmacies, SCPC said. “Such a high degree of market concentration … is the very definition of an oligopolistic marketplace,” Rosenbloom exerted.

The coalition offered seven solutions to try and address drug costs, from a long-term care perspective. Those include eliminating all point-of-sale fees paid by pharmacies to benefit managers, eliminating “gag clauses” in PBM contracts with pharmacies, and recognizing that long-term care pharmacies have limited ability to assure that consumers have access to complete cost info related to their drug purchases. A summary of the letter and recommendations is posted on the SCPC’s website.

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