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.
Space Coast Daily Florida State Rep. Randy Fine filed HB 1043 his week which would save the State of Florida more than $100 million in prescription drug costs while increasing access to critical prescription drugs to Medicaid recipients. “State studies conducted over the past year prove definitively that the only people in Florida benefiting from Prescription Benefits Managers are the Managers themselves,” said Fine. “By allowing PBMs to both serve as the middleman and the retailer we have destroyed the fiduciary duty to be efficient, and as a result, these companies are making hundreds of millions of dollars in government-mandated excess profits.” HB will shift […]Read More
The Center Square There is bipartisan support in the Florida Legislature to impose transparency requirements and restrict pharmacy benefit managers’ (PBMs) role in prescription drug costs. Nevertheless, bills seeking to do so have failed the last few years, including in 2020. A December audit commissioned by Florida’s Agency for Health Care Administration (AHCA) may spur that effort in 2021 after documenting “prescription markups” by PBMs cost Florida’s Medicaid system $113.3 million in 2020. According to the analysis by Millman, PBMs charged $89.6 million in “spread costs,” $17.9 million in administrative fees, $5.8 million in transaction fees and $47,000 in other fees during the 12-month examination […]Read More
Bay News 9 When State Rep. Jackie Toledo (R-District 60) recently tried to fill a prescription for her daughter, she was surprised at how much the drug cost. “Originally, it was going to be $25,” Toledo said. “The pharmacy told me it was going to be $480.” Toledo says although she had a coupon that would have kept the cost at $25, the pharmacist initially refused to accept it. After a back and forth that lasted about 90 minutes, he went ahead and filled the prescription at the reduced price. “They said, ‘It’s because our PBMs would not take it,’ and that’s when I learned […]Read More
The Pharma Letter The US Senate Finance Committee has released a new report detailing findings of its investigation into the role that market dynamics play in the pricing of insulins. The report conclusions further solidify what we already know: perverse incentives in the market drove up insulin costs for patients, according to a posting on the Pharmaceutical and Research Manufacturers of America website, by Brian Newell, deputy vice president of public affairs at PhRMA. Key Details Many insulins have experienced significant net price declines in recent years. Since 2014, the net prices for the most commonly used classes of insulins have declined by 40%-50%, on […]Read More
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