In late September, the Federal Trade Commission filed an administrative complaint against the three largest pharmacy benefit managers, alleging that these third-party service providers artificially inflated the price of insulin. They did so by deliberately refusing to bring lower-priced insulin that was already available to patients because of a “perverse drug rebate” program, the FTC said. In other words, pharmacy benefit managers collect rebates and fees based on a percentage of the list price of the drug from drugmakers, use these rebates to convince health plans and employers to add these drugs to formularies and then manage their pharmacy benefit on behalf of employees. Since the PBMs’ compensation is tied to list price of the drug, they appear to have no incentive to bring lower cost drugs to the market. This becomes a financial burden for patients as well.
In fact, this practice appears to be tied to more than just insulin. Paul Markovich, CEO of Blue Shield of California, experienced the same issue when he tried to bring a lower-priced prostate cancer drug and faced obstacles from the health plan’s PBM – CVS Caremark. Ultimately, he restructured how Blue Shield of California transacts with its PBM bringing in other PBM and pharmacy players. See how Markovich shared this story at a MedCity News event in early spring, months before FTC took action:
#Video #FTCs #Lawsuit #PBMs #Legs
