Follow-up On Physician’s Comments On PBMs

I talked about it in a few previous blog entries – Physicians versus PBMs and Physicians as Victims of System – and I am finally getting around to the source interview in AIS’s Drug Benefit News from October 31, 2008.

Here are a couple of additional thoughts after reading the entire interview with Toni Brayer:

• She questions the value of PBMs (pharmacy benefit managers).
  • [It’s been well documented that PBMs can drive lower trend and have lowered prices.  This was well documented by third parties before PBMs were made central to the Medicare Part D benefit.  Additionally, reading any of the PBM trend reports will show you the money that can be saved by leveraging the trend programs that they offer.]
• She talks about confusion between mail order pharmacies and PBMs.
  • [This is a good example of one thing that PBMs have driven which is mail order utilization which has driven down costs and allowed members to move from 30-day to 90-day prescriptions.  But, mail order is often a key component of the PBM offering.  People should think of them as two different entities – the PBM is focused on claims processing and the rules for benefit administration…the mail order is simply a pharmacy that uses automation to deliver medications to members from a centralized location.]
• She says that PBMs contribute to the double digit increases in pharmacy costs that have occurred. 
  
  • [I think this has been disproven by many of the independent studies.  Additionally, the increases are driven by increased utilization, brand price increases, and new product introductions in most cases.  PBMs drive down reimbursement rates year-over-year, drive generic fill rates, and move members to lower cost channels such as mail order or specialty pharmacies.]
• She talks about the hassle of PAs (prior authorizations).
  • [I completely understand the hassle here and am a little mixed in my opinion.  On the one hand, this is an effective trend management technique using evidence-based standards to manage inappropriate use of medications.  On the other hand, since in most cases, 95%+ of all PAs are approved (if the MD calls in), it does seem like an unnecessary burden.]
• She also talks about confusion between brands and generics.
  • [This has become a bit of a challenge over the past few years as some branded products end up being cheaper than generics.  This has led to formulary tiers at a few companies reflecting more about drug price than brand versus generic.  And, I completely agree that physicians can’t be expected to understand formulary status…without electronic prescribing tools.]
• She talks about pharmacies not automatically refilling prescriptions.
  • [I agree with her here with a few caveats.  Pharmacies should be reaching out to patients to remind them about refilling their medications.  They should be using a barrier survey to understand why they aren’t refilling and help them address these barriers or pushing them back to their physician when appropriate.  In my day job, this is definitely something that I talk with a lot of pharmacies (mail, retail, and specialty) about how to do this.]
• She even talks about tamper-proof prescriptions being a hassle.
  • [In most cases, I think pharmacies offer patients either tamper-proof or standard prescription bottles as a choice.  Obviously the tamper-proof is to reduce the risk of children getting into medications and overdosing.  I don’t know the statistics, but I think it’s a legitimate concern.]
• She compares pharmacies to the Department of Motor Vehicles.
  • [WOW!  I have certainly heard that some of the pharmacies in high density urban areas have ridiculous wait times, but I think this is a pretty bad slam.  The pharmacies that I go to take time to talk with the patients.  They are fairly quick on filling medications.  They use computer technology and automation to drive efficiencies.  We have a huge shortage of pharmacists in the US so there are some challenges.  That was one of the reasons I tried to go to market with a pharmacy kiosk solution.]
• She says that she always considers cost when writing a prescription.
  • [This is great.  I know physicians generally do this for the medications they understand cost on…which are usually the outliers.  But, with over 10,000 medications on the market, I can’t imagine they can keep up with some of the idiocyncracies in the market.  Again, although I am not the biggest believer in electronic prescribing, this is one of the clear advantages here that it can show drug cost and member cost.]
• She thinks that pharmacies are gouging patients by only dispensing 30-day supplies for chronic medications.
  • [This one I can talk about from several perspectives.  First, for new prescriptions, it is usually appropriate to only dispense 30-day prescriptions until the patient stabilizes on an Rx and strength.  Second, most patients have access to mail order where they can get a 90-day prescription…and some retailers offer this also.  Third, pharmacies generally make their money on the things people pick up while in the store…on many Rxs, pharmacy is a loss leader.  Fourth, to fix this issue, we would have to stabilize care so that only one insurer / employer paid since today people move around too much creating a disincentive to have one payor pay for a longer Rx only to have the patient leave before they use up their supply.  Fifth, since most people are non-compliant / non-adherent, there would be a lot of waste.]
• She talks about hardly any medications costing under $40.
  • [Since most people have prescription drug coverage, this would only apply to 3rd tier drugs or specialty medications.  With all the $4 generics, patient assistance programs, and drug discount programs out there, patients don’t pay over $40 in many cases.  If she is talking about drug costs to the payor, then most brands certainly cost over $40 but that now represents just over 30% of all drugs dispensed.  I will let pharma make the arguement, but clearly the research required to bring a new drug to market justifies much of the cost.]
• She suggests pricing brand drugs with no generic alternative lower.
  • [I am all for lowering healthcare costs and don’t think manufacturers should gouge patients, but in a capitalist society, why would I lower the cost of something that people need and have no alternative for?]

Sorry for the long rant, but there was soo much fun stuff to respond to in this interview…I never thought I would be a “defender” of the PBM model, but I really disagree with a lot of her comments.  PBMs do a lot of good things for clients and members even though they are in the “middle man” position.