SCPC Looks Forward to Working with CMS Administrator Seema Verma to Hold PBMs Accountable for Opaque, Controversial Drug Pricing Practices

DATE: March 14, 2017

Verma Praised for Seeking to Work with LTC Pharmacies to Preserve Seniors’ Access to Prescription Drugs

Washington, DC — Following U.S. Senate confirmation of Seema Verma as the new Administrator of the Centers for Medicare and Medicaid Services (CMS), the Senior Care Pharmacy Coalition (SCPC) praised her approval and said the Long-Term Care (LTC) Pharmacy advocacy group looks forward to working with her to hold Pharmacy Benefit Managers (PBMs) more accountable for the opaque, controversial pricing practices that have spurred Congress to propose multiple legislative remedies to do so.

 “SCPC congratulates Ms. Verma for her confirmation, and we look forward to working with her, CMS staff, and the Trump Administration to further uncover, detail and address the key contributing factors to higher drug prices — one of which is clearly abusive pricing and contractual protocols that PBMs unilaterally impose on LTC pharmacies,” said Alan G. Rosenbloom, President and CEO of SCPC.

“PBMs are unscrupulously adding costs to consumers and federal programs, particularly Medicare Part D, and we are hopeful Ms. Verma’s recent written responses to Questions for the Record from Senate Finance Committee members signal Ms. Verma’s openness to all the drivers of escalating prescription drug costs and their impact on Medicare beneficiaries and Medicare expenditures,” Rosenbloom continued. Part D pays for a significant majority of drugs dispensed to patients in LTC facilities and other senior care settings.

Rosenbloom said SCPC was pleased that Ms. Verma’s responses to Questions for the Record from Senator Sherrod Brown (D-OH) demonstrate her willingness to evaluate PBM pricing and practices and their impact on beneficiaries and Medicare expenditures.  In those responses, she noted that she would welcome the opportunity to work with pharmacies and other interested parties “to preserve seniors’ access to drugs,” and to resolve pending issues related to the 2014 “Proposed Guidance on Direct and Indirect Remuneration (DIR) and Pharmacy Price Concessions.”

DIR fees refer to a variety of charges PBMs impose on pharmacies after the point-of-sale.  PBMs may establish any fees they want and set any amounts they want, which in turn contributes to higher out-of-pocket costs to beneficiaries and to greater Medicare Part D expenditures.

The SCPC leader also praised Ms. Verma for recently telling the Senate Finance Committee, “Competition is key to holding down the cost to pharmaceuticals… We need to do everything we can do to make drugs more affordable to seniors… I think there are many ways to achieve that goal.” (Source: Politico Pro 2/16/07)

Rosenbloom concluded: “Currently, the Part D marketplace is not a free market with full and fair competition; rather, it is an oligopolistic market dominated by a handful of PBMs that are also part of larger corporate organizations — creating a marketplace rife with opportunities for abuse to the detriment of Medicare beneficiaries and the Medicare program itself.”

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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.