Prescription drug prices are on the rise, largely due to practices by pharmacy benefit managers, according to the National Alliance of Healthcare Purchaser Coalitions (National Alliance). That’s why on Monday, the organization released a playbook for employers that explains the drivers behind prescription drug costs and what the best practices are.
“It talks about issues around how employers can put themselves back in control,” said Michael Thompson, president and CEO of the National Alliance, in an interview.
The National Alliance is a nonprofit organization that represents more than 40 coalitions of purchasers of healthcare, including self-insured employers, school districts, union groups and more.
Its new playbook outlines the top concerns employers have when it comes to pharmacy benefit management, including the promotion of higher-priced drugs despite lower-priced drugs being available and the preference of brand drugs over generics or biosimilars. These concerns were identified by an advisory committee and purchasers that work with the National Alliance.
“We took a stab at the issues we keep hearing [about]. … If it was just one thing, we wouldn’t need a playbook. But at its core, it’s a system where too many folks have their hands in the till,” Thompson said. These hands include PBMS, consultants, insurance companies, drug manufacturers and more.
It also offers information about practices in the PBM supply chain that are raising prices, such as spread pricing. This refers to a practice in which PBMs charge health plans more for prescription drugs than what they pay the pharmacies and then keep the difference.
The playbook lays out several recommendations for employers. This includes working with independent and qualified advisors who have experience with pharmacy benefit management. Because employers don’t always understand pharmacy benefits, they lean on benefits consultants for advice. However, the largest PBMs will pay referral fees to pharmacy benefit consultants to direct employers to their organization, the playbook charges. To get relevant information about PBM-consultant relationships, the playbook provides a sample questionnaire that asks consultants about their experience in pharmacy benefits and whether they have any conflicts of interest.
“We expect that this is going to stir things up considerably, not just in the PBM world but in the advisor world,” Thompson said. “We’ve called the advisors out that they’re not doing their jobs and they need to step in and get it right going forward.”
The playbook is free and available to all employers, not just those who work with the National Alliance, Thompson said. But in launching the playbook, the organization isn’t looking to put an end to PBMs, he stressed.
“This doesn’t mean that PBMs will be put out of business or that somehow drugs will suddenly be cheap,” Thompson stated. “That isn’t the point. What we want to have is a system that works, a system … [where] the people who are managing pharmacy benefit management are managing it with an orientation and refers the right drug at the right price for the right patient.”
The release of the playbook comes at a time when there is both FTC and Congressional scrutiny on PBMs — the three largest of who (CVS Caremark, Express Scripts and OptumRx) control 80% of the marketplace.
Photo: cagkansayin, Getty Images
