US consumer groups urge Senate to keep PBM transparency in health care reform

More than 30 groups representing consumer, labor and Medicare beneficiaries in the USA have joined a growing coalition urging Congress to support transparency requirements for pharmacy benefit managers (PBMs) in the health care reform proposals being considered by Congress. A total of 37 organizations wrote to Senate leaders to ask that Senator Maria Cantwell's (Democrat, Washington) amendment, approved by the Senate Finance Committee, be included in any final package voted on by the full Senate.

On October 1, the Senate Finance Committee passed an amendment to the America's Healthy Futures Act of 2009 sponsored by Senator Cantwell that will for the first time provide states with the ability to negotiate with health insurers in order to provide high quality health care coverage at a lower cost. Rather than handing tax subsidies to insurance companies, Ms Cantwell's amendment directs this money to the states, and lets them use their purchasing power to negotiate with private insurance carriers. Modeled after Washington State's Basic Health Plan, which has a 20-year track record of reducing costs and providing quality care, her plan could provide coverage to 75% of the uninsured population.

The first consumer group letter, organized by Community Catalyst, a national consumer advocacy organization, showed support from 35 consumer advocate and labor organizations across nine states. The letter, signed by Consumers Union, the Medicare Rights Center, Public Citizen the US Public Interest Research Group (PIRG), among others, states: 'This amendment would help lower the costs of the health plans operating in the exchange and health plans subsidized under Medicare Part-D, by requiring confidential disclosures from their PBMs about both the rebates that their PBM receives from drug manufacturers, and about the PBM's actual costs of dispensing the drugs covered by the health plan.'

PBM deception and anti-consumer practices alleged

The second letter, from the Consumer Federation of America, US PIRG and the National Legislative Association on Prescription Drug Prices (NLARx), argues: 'PBMs represent the most rapidly growing segment of health care spending, and yet they are the only part of the health care market that is still unregulated. Because of the lack of regulation PBMs engage in fraudulent and deceptive practices, resulting in several enforcement actions by a coalition of state attorneys generals that have secured over $371 million in fines and penalties. At the same time the profits of the three major PBMs have skyrocketed from $900 million to over $2.7 billion annually. No other segment of the health care market has a record of such deceptive, egregious and anti-consumer practices. Transparency legislation is necessary to curb these harmful practices.' Those same groups had previously endorsed a similar amendment added to the House Energy and Commerce Committee health care reform bill, HR 3200, from Representative Anthony Weiner (Democrat, New York).

'From coast to coast, a growing consensus is emerging on the need for greater PBM transparency to restrain rising prescription drug prices,' said Bruce Roberts. National Community Pharmacists Association (NCPA) executive vice president and chief executive. 'Experience has shown that these corporate middlemen routinely inflate the costs of prescription drug benefits. Among other practices, they charge health plan sponsors much more than they reimburse pharmacies as well as pocket large commissions on rebates paid by drug manufacturers. Common-sense disclosure requirements ensure that health plan sponsors have the necessary information to determine which, if any, PBM offers the best return on the PBM premium.

'PBMs claim that disclosure increases costs, but last week the Congressional Budget Office again deemed it budget neutral,' Mr Roberts added. 'Ultimately costs would actually decrease over time, as the Pentagon, the states of New Jersey and Texas and many others have concluded. Given this outpouring of consumer support, we urge Congressional leaders to ensure that these PBM transparency provisions remain part of any health care reform legislation approved by either chamber,' he concluded.