The Role of Pharmacy Benefit Managers and Skyrocketing Cost of Medications.

This article reviews how pharmacy benefit managers (PBMs) play a role in the delivery of modern healthcare services. A discussion regarding the lack of transparency regarding PBM services, consolidation of the market and vertical integration, as well as a typical flow of payments related to medications is provided. Authors review what higher drug costs are doing to patients, and provide an overview of what is happening to fight these trends.

Consumer Out-Of-Pocket Drug Prices Grew Faster Than Prices Faced By Insurers After Accounting For Rebates, 2007-20.

The rising price of branded drugs has garnered considerable attention from the public and policy makers. This article investigates the complexities of pharmaceutical pricing, with an emphasis on the overlooked aspects of manufacturer rebates and out-of-pocket prices. Rebates granted by pharmaceutical manufacturers to insurers reduce the actual prices paid by insurers, causing the true prices of prescriptions to diverge from official statistics. We combined claims data on branded retail prescription drugs with estimates on rebates to provide new price index measures based on pharmacy prices, negotiated prices (after rebates), and out-of-pocket prices for the commercially insured population during the period 2007-20. We found that although retail pharmacy prices increased 9.1 percent annually, negotiated prices grew by a mere 4.3 percent, highlighting the importance of rebates in price measurement. Surprisingly, consumer out-of-pocket prices diverged from negotiated prices after 2016, growing 5.8 percent annually while negotiated prices remained flat. The concern over drug price inflation is more reflective of the rapid increase in consumer out-of-pocket expenses than the stagnated inflation of negotiated prices paid by insurers after 2016.

Pharmacy Benefit Manager Market Concentration for Prescriptions Filled at US Retail Pharmacies.

This study analyzes pharmacy benefit manager market concentration for commercial insurance, Medicare Part D, and Medicaid managed care in the US.

A primer on copay accumulators, copay maximizers, and alternative funding programs.

Insurer or self-insured employer's plans are increasingly using copay accumulator, copay maximizer, and alternative funding programs (AFPs) to reduce plan spending on high-priced prescriptions. These programs differ in their structure and impact on patient affordability but typically decrease the insurer or self-insured employer's financial responsibility for high-priced drugs and increase the complexity of specialty medication access for patients. The aim of this primer is to describe the structure of copay accumulator, copay maximizer, and AFPs to improve understanding of these cost-shifting strategies and help clinicians and patients navigate medication access and affordability issues to minimize treatment delays or non-initiation.

Patient liability, treatment adherence, and treatment persistence associated with state bans of copay accumulator adjustment programs.

BACKGROUND: Health insurers have increased the use of copay accumulator adjustment programs (CAAPs) to control costs; however, some states within the United States have banned the use of CAAPs to protect patients from rising out-of-pocket expenses. OBJECTIVE: To assess the impact of state CAAP bans on patient liability, treatment adherence, and treatment persistence. METHODS: This was a retrospective cohort study using administrative claims recorded in the IQVIA PharMetrics Plus database. Data were extracted for patients with fully insured commercial plans receiving autoimmune or multiple sclerosis drugs between January 1, 2017, and December 31, 2021. Patient liability was defined as the difference in insurer allowed and paid amounts. Treatment adherence was measured as the proportion of days covered over a 1-year period, with "adherent" defined as a proportion of days covered greater than or equal to 80%. Treatment persistence was defined as time from treatment initiation to discontinuation (a period of 60 days without supply of treatment). The analysis compared differences in outcomes in states that implemented a CAAP ban during the study period (Arizona, Georgia, Illinois, Virginia, West Virginia) with states that did not, for before and after the date of ban. RESULTS: States that implemented a CAAP ban had relative reductions in patient liability after the first 2 months, which ranged from 41% to 63%, with monthly savings ranging from $128 to $520. Patients in states with a CAAP ban had 14% greater odds of being adherent to their treatment after policy implementation than patients in states without a CAAP ban and a 13% reduction in risk of discontinuing. CONCLUSIONS: The implementation of state legislation to restrict the use of CAAPs in state-regulated plans was associated with reductions in patient liability and improvements in treatment adherence and persistence for the 5 states that were early implementers of a CAAP ban. These results may offer insights for states that have recently implemented a CAAP ban, as well as for those considering enacting similar legislation.

Use of privacy-preserving record linkage to examine the dispensing of pharmaceutical benefits scheme medicines to pregnant women in Western Australia.

PURPOSE: Medications are commonly used during pregnancy to manage pre-existing conditions and conditions that arise during pregnancy. However, not all medications are safe to use in pregnancy. This study utilized privacy-preserving record linkage (PPRL) to examine medications dispensed under the national Pharmaceutical Benefits Scheme (PBS) to pregnant women in Western Australia (WA) overall and by medication safety category. METHODS: In this retrospective, cross-sectional, population-based study, state perinatal records (Midwives Notification Scheme) were linked with national PBS dispensing data using PPRL. Live and stillborn neonates born between 2012 and 2019 in WA were included. The proportion of pregnancies during which the mother was dispensed a PBS medication was calculated, overall and by medication safety category. Factors associated with PBS medication dispensing were examined using logistic regression. RESULTS: PPRL linkage identified matching records for 97.4% of women with perinatal records. A total of 271 739 pregnancies were identified, with 158 585 (58.4%) pregnancies involving the dispensing of at least one PBS medication. Category A medications (those considered safe in pregnancy) were the most commonly dispensed (n = 119 126, 43.8%) followed by B3 (n = 51 135, 18.8%) and B1 (n = 42 388, 15.6%) medication (those with unknown safety). Over the study period, the dispensing of PBS medications in pregnancy increased (OR: 1.06, 95%CI: 1.06, 1.07). The strongest predictor of medication dispensing in pregnancy was pre-pregnancy dispensing (OR: 3.61, 95%CI: 3.54, 3.68). Other factors associated with medication use in pregnancy were smoking, older maternal age, obesity, and prior pregnancies. CONCLUSION: Privacy preserving record linkage provides a way to link cross-jurisdictional data while preserving patient confidentiality and data security. The dispensing of PBS medication in pregnancy was common and increased over time, with approximately 60% of women dispensed at least one medication during pregnancy.

US commercial health plan coverage dynamics in pulmonary arterial hypertension therapies.

BACKGROUND: Health plan coverage is central to patient access to care, especially for rare, chronic diseases. For specialty drugs, coverage varies, resulting in barriers to access. Pulmonary arterial hypertension (PAH) is a rare, progressive, and fatal disease. Guidelines suggest starting or rapidly escalating to combination therapy with drugs of differing classes (phosphodiesterase 5 inhibitors [PDE5is], soluble guanylate cyclase stimulators [sGC stimulators], endothelin receptor antagonists [ERAs], and prostacyclin pathway agents [PPAs]). OBJECTIVE: To assess the variation in commercial health plan coverage for PAH treatments and how coverage has evolved. To examine the frequency of coverage updates and evidence cited in plan policies. METHODS: We used the Tufts Medical Center Specialty Drug Evidence and Coverage database, which includes publicly available specialty drug coverage policies. Overall, and at the drug and treatment class level, we identified plan-imposed coverage restrictions beyond the drug's US Food and Drug Administration label, including step therapy protocols, clinical restrictions (eg, disease severity), and prescriber specialty requirements. We analyzed variation in coverage restrictiveness and how coverage has changed over time. We determined how often plans update their policies. Finally, we categorized the cited evidence into 6 different types. RESULTS: Results reflected plan coverage policies for 13 PAH drugs active between August 2017 and August 2022 and issued by 17 large US commercial health plans, representing 70% of covered lives. Coverage restrictions varied mainly by step therapy protocols and prescriber restrictions. Seven plans had step therapy protocols for most drugs, 9 for at least one drug, and 1 had none. Ten plans required specialist (cardiologist or pulmonologist) prescribing for at least one drug, and 7 did not. Coverage restrictions increased over time: the proportion of policies with at least 1 restriction increased from 38% to 73%, and the proportion with step therapy protocols increased from 29% to 46%, with generics as the most common step. The proportion of policies with step therapy protocols increased for every therapy class with generic availability: 18% to 59% for ERAs, 33% to 77% for PDE5is, and 33% to 43% for PPAs. The proportion of policies with prescriber requirements increased from 24% to 48%. Plans updated their policies 58% of the time annually and most often cited the 2019 CHEST clinical guidelines, followed by randomized controlled trials. CONCLUSIONS: Plan use of coverage restrictions for PAH therapies increased over time and varied across both drugs and plans. Inconsistency among health plans may complicate patient access and reduce the proportion who can persist on PAH treatments.

Sustaining competition for biosimilars on the pharmacy benefit: Use it or lose it.

Congress passed the Biologic Price Competition and Innovation Act of 2009, specifically to offer market competition as a counterweight to the rising costs of biologic medicines. As of April 15, 2024, 49 biosimilars have been approved by the US Food and Drug Administration in 15 biologic categories. Biosimilar competition has been undeniably successful: Through 2022, biosimilars have saved the US health system $23.6 billion, without significant care disruption or reduced quality. Through 2023, adalimumab biosimilar competition has added an additional $6.5 billion to this total, primarily through greater rebates from the reference manufacturer. Despite launching at discounts as great as 85%, adalimumab biosimilars have not been given preferred formulary positioning in the vast majority of cases and have thus gained only 3% of market share through 2023, largely because of payers' and pharmacy benefit managers' preference for rebates over discounts. This situation may negatively influence future biosimilar development, posing a threat to a biosimilar pipeline that represents hundreds of billions in savings over the next 10 years.

A primer on quality measurement and reporting in pharmacy benefit plans.

Pharmacy benefit plans in the United States are evaluated on quality measures and other requirements of the government and accrediting organizations. This primer describes the roles of key organizations involved in measuring and reporting quality in pharmacy benefit plans and explains the methods that pharmacy benefit plans use to promote quality of medication use.

Pharmacy Benefit Managers in the Eye of the Storm: Growing Multipartite Scrutiny.

The high cost of prescription drugs in the U.S. remains an ongoing national challenge. A recurring focal point in discussions over this distressing steady state is the role(s) played by Pharmacy Benefit Managers (PBMs) who negotiate drug prices with pharmaceutical manufacturers, conduct drug utilization reviews, engage in disease management, and see to formulary creation. At their inception, the multiple newly established PBMs were arguably intent on constraining the rise of prescription drug prices. At the time of this writing, however, the lion share of a far less competitive PBM market is controlled by CVS Caremark, Express Scripts, and OptumRx. It is this evolving reality which could be interpreted to mean that the PBMs may have become part of the problem, rather than part of the solution. Expanded scrutiny of the PBMs by Federal and State authorities as well as by Professional Medical Associations must not be delayed with an eye toward affording the public with relief from the high cost of prescription drugs.

Pharmacy Benefit Managers: History, Business Practices, Economics, and Policy.

Importance: Pharmacy benefit managers (PBMs) play a major role in the provision of pharmacy services by acting as intermediaries between pharmacies, plan sponsors (insurance companies and employers), pharmaceutical manufacturers, and drug wholesalers. As their role and visibility have increased, PBMs have come under increased scrutiny from policymakers. However, no prior literature has systematically described the history, business practices, and policymaking of PBMs. Objective: To provide an overview of the PBM industry, including its history, the evolution of services provided by PBMs, an assessment of the current policy landscape, and analysis of how proposed policies could affect PBM practices and patient care. Evidence: This work reviews historical events; previous and current industry practices and publications; prior academic literature, existing statutes, regulations, and court cases; and recent legislative reforms and agency actions regarding PBMs. Findings: Pharmacy benefit managers evolved in parallel with the pharmaceutical manufacturing and health insurance industries. The evolution of the PBM industry has been characterized by horizontal and vertical integration and market concentration. The PBM provides 5 key functions: formulary design, utilization management, price negotiation, pharmacy network formation, and mail order pharmacy services. Criticism of the PBM industry centers around the lack of competition, pricing, agency problems, and lack of transparency. Legislation to address these concerns has been introduced at the state and federal levels, but the potential for these policies to address concerns about PBMs is unknown and may be eclipsed by private sector responses. Conclusions and Relevance: Pharmacy benefit managers are intermediaries in the pharmaceutical supply chain and perform multiple roles in the management and distribution of pharmaceuticals to patients. When regulating PBMs, it is important to adopt policies that address market failure problems by improving PBM competition as opposed to policies designed to serve the narrow financial interests of other market participants (eg, pharmacies, pharmaceutical manufacturers) without meeting the needs of consumers.

The impact of prescription drug insurance on cost related non-adherence to medications in Canada: A Heckman sample selection approach.

Unlike some other high-income counties, Canada does not provide universal prescription drug coverage. The various extent of coverage may left some Canadians vulnerable to cost-related non-adherence (CRNA) to medications. Using data from the 2015 national cycle of the Canadian Community Health Survey, we examine the impact of having private and public drug coverage on mitigating the risk of CRNA with a logit model and a Heckman selection model. CRNA was only observed in respondents who had prescriptions to fill, and respondents did not randomly make decisions on whether to get a prescription. This results in a classic sample selection problem. We found a higher estimated probability of reporting CRNA for uninsured respondents from the Heckman selection model than from the logit model. Respondents with government coverage only had a slightly higher probability of reporting CRNA relative to respondents with private coverage. These findings suggest that, without accounting for sample selection, the risk of not having drug insurance coverage is likely to be underestimated. Moreover, despite covering a less healthy cohort of respondents, the government insurance plans reduce risk of CRNA to a comparable level with private insurance.