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Chronically Ill Patients Want Voice in FTC Pharmacy Agent Probe

Chronic illness patients want the FTC to incorporate their experiences getting treatment into the agency’s pharmacy benefit manager probe.

  • Patient groups wary of formulary changes, prior authorization

  • PBMs blame drugmakers for rising prescription costs

Chronically ill patients are pushing the Federal Trade Commission to incorporate their experiences getting treatment into the agency’s study on the entities that manage prescription drug benefits.

Pharmacy benefit managers say their role is to help ensure Americans get the most effective treatment at the lowest price. But patient advocates say that PBMs’ formulary designs and authorization requirements have delayed access to AbbVie‘s arthritis drug Humira, Gilead‘s HIV treatment Truvada, and other medications for patients who may only respond to a specific, specialized drug.

“PBMs are supposed to act as a counterweight on behalf of plan sponsors and government programs,” said Antonio Ciaccia, CEO of Ohio-based drug pricing data firm 46brooklyn Research.

Looking at “the degree with which PBMs’ incentives have become distorted” can serve as “a tremendous opportunity to provide benefits to the consumer,” he said.

PBMs manage drug coverage for health insurers, large employers, Medicare prescription drug plans, and others. They negotiate discounts from drugmakers, collect rebates from them, and determine how pharmacies get reimbursed for distributing prescriptions. Drugmakers have long argued that those rebates result in higher initial list prices for medications.

The FTC voted unanimously last month to investigate PBMs and issued orders to CVS Caremark, Express Scripts Inc., and four other of the largest PBMs to submit data on their business practices. Patient groups, doctors, drugmakers, and pharmacists submitted more than 24,000 public comments in response to the agency’s request for input.

Advocacy groups and drug pricing analysts say the FTC should incorporate in its study the feedback it has received from patients, along with specific data from manufacturers and pharmacies on their negotiations with PBMs. They argue this could help zero in on how practices like formulary changes and prior authorization requirements are raising costs and limiting patient access to care.

The Pharmaceutical Care Management Association, the leading PBM trade group, maintains that drugmaker price setting is the main cause of higher costs, and that PBMs save 40% to 50% on prescription drugs, an average of $962 per person per year.

“A lot of patients are as frustrated as the rest of us with the cost of health care generally and the prices of prescription drugs specifically,” PCMA President and CEO JC Scott said in an interview. “Our companies do our best to provide those medications at the lowest cost possible for the patients.”

Formulary Design

Formularies show which drugs a health plan covers for patients, and sudden changes to this list may leave patients unable to afford needed medications, health organizations and advocacy groups say.

The FTC has said that its probe will look at, in part, “the impact of rebates and fees from drug manufacturers on formulary design and the costs of prescription drugs to payers and patients.”

Rebates “really dictate what medication is going to be on a formulary,” Amanda Grimm Wiegrefe, director of regulatory affairs at the American College of Rheumatology, said.

“If the PBM gets the biggest rebate for a Humira drug rather than Enbrel, then the Humira is going to be on the formulary, and Enbrel is not,” she said, even though “Enbrel sometimes works better for some patients, Humira works better for other patients.”

PBMs and health insurance plans can drop or add items to lists of covered medications. These formulary changes can be particularly detrimental for those who rely on continuous access to treatment to manage their disease, said Quardricos Driskell, vice president of public policy and government affairs at the Autoimmune Association.

“If a patient who’s living with an autoimmune condition is not able to access their medication due to a formulary change, particularly in mid-year, that causes their immune system to really start to attack the body, which thus means that the patient condition worsens,” said Driskell, whose organization lists Pfizer and several other top pharmaceutical companies among its strategic partners.

The PCMA has argued that its members help deliver discounts for consumers, citing a Government Accountability Office report stating that PBM-negotiated rebates are used by plan sponsors to control premiums for Medicare beneficiaries. Scott said that PBMs recommend formularies to plan sponsors, and that health plans ultimately make the final decision on which drugs are covered.

Prior Authorization

Tools that PBMs say they use to steer patients and prescribers to the most effective and safest medications may be inadvertently delaying treatment access for some patients. PBMs use certain utilization management tools to help ensure patients aren’t automatically being prescribed the most expensive drugs. They can also prevent a patient from “being prescribed something that’s going to interact badly with another drug,” Scott said.

These tools include prior authorizations, in which a health-care provider has to submit to the insurance company a patient’s diagnosis, and show that it’s “a medically acceptable treatment” and is “within the standard of care,” Grimm Wiegrefe said.

She said that while almost all treatments that go through the prior authorization process get approved, it can sometimes take as long as a month. Many of the more than 7,000 physicians and health professionals her rheumatology association represents employ individuals who are exclusively in charge of overseeing prior authorizations, Grimm Wiegrefe said.

“That is an incredible administrative burden,” and is ultimately “hindering access to care” for patients, she added.

Health plans and PBMs also have step therapy programs that require certain patients to try less expensive drugs first before they move to higher cost treatments. PBMs like Express Scripts and Blue Cross Blue Shield’s Prime Therapeutics have lists with dozens of drugs that require prior authorizations or step therapy.

Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, said that while these programs may push patients toward less costly treatments, they may not be as helpful for those with HIV, which has few cheaper generics that work as effectively as brand-name medications. The institute receives funding from biotech and pharmaceutical companies like Genentech and Johnson & Johnson.

“You don’t want” a patient to “fail on a HIV drug, because when you do, you build up resistance to all drugs in that class forever,” Schmid said.

Measuring Impact

Analyzing PBMs’s practices will require going beyond the data it gets from these companies, drug pricing analysts say.

It can be difficult to definitively determine whether formulary changes or waiting on prior authorizations are responsible for a patient’s condition changing, Ciaccia said. For example, a patient on a certain blood thinner who is taken off their medication after its removed from the formulary “could simultaneously have a problem internally that is just making the disease state get worse.”

Ciaccia said the FTC could consider issuing subpoenas for information on “the degree of call volume and complaints from patients or physicians,” on adverse events following formulary changes or delays to prior authorizations.

The PCMA agrees that the FTC should analyze a wide range of data to get a more comprehensive understanding of how drug prices are formed. But Scott said he’s confident any study will ultimately show that “manufacturers continue to choose to set high prices and to escalate those prices.”

David Balto, former assistant director for policy and evaluation at the FTC’s Bureau of Competition, said “it will be incumbent on the FTC staff to go and make” the PBM probe a “360-degree analysis.”

“They need to go out to consumer and patient groups and get their perspective of the impact of these restrictive networks,” he said.

To contact the reporter on this story: Celine Castronuovo at


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