Preserve Patient Access to Neighborhood Pharmacies
Studies and Data
AHCA Commissioned Analysis of FL Medicaid Confirms Over $90Million in PBM Spread Pricing
This recent independent analysis of Florida Medicare commissioned by the Agency for Health Care Administration (ACHA) sheds light on PBM fee and pricing practices in Florida's Statewide Medicaid Managed Care System (SMMC). The analysis confirms that PBMs have taken over $90 Million per year in excess profits through the use of spread pricing.
Legislative Leaders are Calling for Action
“Markets fail when markets get corrupted and that is what has happened here. When the middleman is allowed to own the end-retailer then the middlemen’s incentive to manage cost appropriately for the benefit of the chain is broken. And that is what has happened here.”
-- Rep. Randy Fine
“The power and control of PBMs has grown significantly over the last five to ten years. What we’re seeing is insurance companies owning PBMs and PBMs owning insurance companies. What is happening in the long run is that the price of prescriptions are going up.”
-- Sen. Gayle Harrell
“The practices PBMs use to drive up profits are complex, but the solution is simple: We need to increase access to care for all Floridians while ensuring that prescription drug savings make it to the patient and not the pockets of predatory PBMs.”
-- Rep. Jackie Toledo
When it comes to PBMs,
we all pay the price.
Pharmacy Benefit Managers (PBMs) are middlemen who have strayed from their original purpose of negotiating savings for patients and now keep the profits for themselves, leaving the rest of Florida’s consumers to pay higher drug prices. PBMs use anti-competitive practices to short-circuit the free market and create health care monopolies.
These predatory tactics decrease access for patients, force neighborhood pharmacies to close down, and raise costs for everyone. We need legislation that will increase transparency and accountability on PBMs and ensure that patients are prioritized over profits.
Who do PBM predatory tactics hurt?
Forcing neighborhood pharmacies out of PBM health networks causes many patients to drive extra miles from their home to receive medications simply because their local pharmacy is not in their plan. This not only steers business away from neighborhood pharmacies, it severely restricts patients’ access to medications and drives up their costs.
Many neighborhood pharmacies diligently refill prescriptions only to be hit with reimbursements that are pennies on the dollar – with some even facing negative reimbursements or clawbacks – while PBMs continue to make record-breaking profits. No business can sustain operations under this model, and it is a clear manipulation of the system that promotes anti-competitive practices.
PBMs are overstepping their scope and making medical decisions best left to physicians and pharmacists – and their years of training. PBMs are motivated by profit, not by what is best for the patient, and many times PBMs require the use of drugs or specialty medications that are not the most beneficial for the patient.
The anti-competitive policies that PBMs push increase health care costs for everyone. PBMs don’t make or provide the drug – they don’t even touch the drug – yet they add costs to the overall health care system that must be absorbed by pharmacists, patients, and all Floridians.
How Can We Fix This?
This year, the Florida Legislature is considering legislation to address these challenges. SB 1444 and HB 961 implement transparency, accountability, and free-market policies that will help preserve patient access and keep drug prices affordable.
Here are some highlights of the legislation:
- Protect the free market by prohibiting anti-competitive policies that reduce patient choice and create health care monopolies
- Eliminate the practice of steering patients to PBM-owned pharmacies, especially when it involves taxpayer dollars
- Prohibit the predatory practices that PBMs use to squeeze independent pharmacies, including post-adjudication fees, spread pricing, and cumbersome audit practices
By supporting this legislation, we can bring about concrete change in the industry and put a stop to the abuses that leave Floridians suffering.
Forbes A campaign against drug rebate kickbacks isn’t something you’d typically think would have much relevance to small businesses in other industries. However, a recent effort by a Florida-based small business pharmacy advocacy group, SPAR (Small Business Pharmacies Aligned for Reform), is offering a glimpse of how small, challenger businesses can fight back against much larger and more powerful organizations—and win. The founding of SPAR dates to a Trump administration Executive Order to prevent the drug rebate kickbacks passed between prescription drug manufacturers and pharmacy benefit managers (PBMs). Essentially, PBMs, which work with health insurance companies, negotiate with pharmaceutical companies to receive a portion of a drug’s […]Read More
Grit Daily A study exploring Florida’s prescription drug costs through the Medicaid program found that pharmacy benefit managers (PBMs) profited $89 million dollars, mostly from a spread pricing contract scheme that charges the state higher cost than will be disbursed to the pharmacist. Florida’s Medicaid program is contracted out to private healthcare companies like CVS Caremark, Humana, etc. Those private companies then take Medicaid dollars and draw up contracts with pharmacies around the state. PBMs play the role of negotiating drug prices between pharmacy suppliers and payers; they have an outsize stake in what consumers pay for their prescription drugs. PBMs in Florida operate in 2 ways depending on […]Read More
TalkBusiness.net The U.S. Supreme Court ruled in favor of an Arkansas law on a controversial pharmacy benefit manager (PBM) statute on Thursday (Dec. 10). The 19-page decision from the nation’s high court was unanimous. The ruling in Rutledge v. Pharmaceutical Care Management Association centered around Act 900, which was passed in Arkansas in 2015. Act 900 regulated pharmacy benefit managers, which act as middlemen between pharmacists and insurance providers. Their reimbursement rates theoretically incentivize pharmacies to find lower wholesale drug prices. Pharmacists said the PBMs’ reimbursement rates were too low – in fact, too often below the pharmacists’ cost of procurement. The Arkansas law requires PBMs to increase reimbursements for […]Read More
Stat News As states struggle to control the cost of prescription medicines, a new report found pharmacy benefit managers pocketed more than $89 million collected on behalf of the Florida Medicaid program — and the consultants who ran the analysis recommended state officials rework the arrangements. The report found that PBMs appear to have profited from what is known as spread pricing, which refers to the dispensing fees that these companies pay pharmacies but then bill at a different rate to state Medicaid programs. In this instance, the PBMs working with managed care plans made $8.64 for each Medicaid prescription, which accounted for 9.5% of […]Read More
Bay News 9 — Tampa Rep. Jackie Toledo says she will soon refile a version of her 2020 proposed legislation that intends to lower prescription drug prices by holding pharmacy benefit managers (PBMs) more accountable. PBMs are third-party companies that serve as intermediaries between drug companies and insurance companies. They pool money from contracted pharmacies to gain purchasing power, then negotiate rates and rebates with the pharmaceutical companies. Their business agreements have raised questions about pricing transparency and state legislators, like Toledo, have been pushing to regulate PBMs in recent years. “Right now, they’re unregulated, so they’re taking advantage of the system,” Toledo said. “They’re pretty […]Read More
Medium.com Though you may have never heard of them, pharmacy benefit managers (PBMs) play a critical role in the price you and I pay for prescription drugs at the pharmacy. Like rats in a sewer, PBMs thrive on secrecy. Once the processors of prescription drug claims, today the largest PBMs are subsidiaries of the largest health insurers, helping corporations like CVS Health and UnitedHealth leap to 5th and 7th place respectively on the Fortune 500 — just behind better-known corporations like Walmart, Amazon, and Apple. Bear in mind PBMs and insurers don’t manufacture a product or provide a service. They’re simply extremely wealthy middlemen. PBMs […]Read More