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Actually, CVS and Pharmacy Benefit Managers Are Good for Health Care

A response to Michael Rieger's recent piece at TAC about pharmaceutical companies.

Editor’s note: TAC recently ran a piece, “How Pill Middlemen Like CVS Are Bilking the Health Care System” by Michael Rieger, that attacked Pharmacy Benefit Managers like CVS for driving up drug prices. What follows is a response by Kristin Bass of the Pharmaceutical Care Management Association (PCMA), which we are publishing in the interest of equal time.

In a piece recently published at The American Conservative, the author makes several inaccurate assumptions about pharmacy benefit managers (PBMs). The truth is that PBMs advocate on behalf of consumers to ensure access and affordability to prescription drugs.

Those false and misleading claims must be addressed to set the record straight on PBMs’ role in the health care system.

One important way PBMs reduce prescription drug costs is by negotiating with drug manufacturers to lower the price of the drug. Only drug manufacturers can set and raise drug prices, and PBMs have been very effective at reducing the net price through rebates.

Erroneous statements made by the author claim that PBMs are keeping the rebates for profit. That’s wrong. A Government Accountability Office report released earlier this month shows that PBMs retained less than 1 percent of rebate dollars in Medicare Part D. Similarly, in the private sector, on average, 90 percent of rebate dollars negotiated by PBMs flow back to clients to lower the cost of care. Some large PBMs report that they pass back 95 to 98 percent of rebate dollars.

In addition, research shows that for every $100 spent in the supply chain on branded drugs, PBMs retain about two dollars, compared with $58 for the manufacturers. So, PBMs are not the big moneymakers in the prescription drug supply chain, which the author purports.

Furthermore, the editorial implies that anyone can negotiate to lower drug costs. Well, if the author, or anyone, wants to negotiate with drug manufacturers, they are free and welcome to do so. The reality is, employers choose to hire PBMs to lower drug costs and improve the quality of pharmacy benefits. A new report by the National Business Group on Health found that more employers are relying on PBMs’ expertise.

Curiously, the author points out legislation that eliminates so-called gag clauses, but ignores the fact that the PBM industry supported the legislation. The fact is that PBMs support patients paying the lowest possible cost at the pharmacy counter.

And when it comes to transparency, PBMs practice and support transparency for patients, their physicians, as well as clients and policymakers.

PBMs offer critical clinical services in an evolving health care landscape, including: monitoring drug safety; managing drug-related side effects, engaging in adherence and persistency support; providing ongoing clinical support directly to patients and their caregivers; improving patient clinical outcomes; and proving population health-focused information and patient support.

PBMs are an integral part of solving America’s prescription drug affordability challenge and we will continue to help deliver real solutions that reduce prescription drug costs.

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