Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics
I am the corporate counsel for a $130 million per year nationwide infusion therapy provider (HIT). We have pharmacies in CA, TX, IL, MA, NJ, PA and FL. We serve over 1500 patients from 1 year to 90 years old every day in 39 states. We have contracts with over 500 payors, about half of which are PBMs. Our company is owned and operated by clinical pharmacists with over 30 years of expense in the home infusion business. Over the last 5 years we have seen significant abuse by PMBs that have a negative impact on our patients. We see four main abusive behaviors that negatively impact our patients choice, cost of health care and clinical outcomes: 1) The negative impact that PBMs are having on patient access due to authorization and formulary issues: PMBs set their own inclusion criteria in ways to minimize how many patients can get affordable IV therapy and they also set their own formularies so that patients are forced to get the drugs that the PBM gets rebates from the drug makers or the PBM will not authorize the drug therapy or the patient may have to pay up to a 50% copay to not use the formulary drug. 2)Narrow network issues: PBMs are making it harder and harder for a HIT provider to become contracted and remain contracted with a PBM. this behavior limits patient choice of HIT providers and raises the cost of those HIT providers as the comply with excessive credentialing documentation required by the PBM. 3)PBMs being purchased by insurance payors is a common theme recently. These purchases end up in the PBM being directed by the payor to funnel business to payor associated pharmacies and make in increasingly difficult for independent HIT providers to be able to provide services and bill the PBM at market rate costs. Additionally, many states have any willing provider laws which are violated by PBMS when the PBM has Managed Medicare or Medicaid patients an the PBM makes it difficult for HIT providers to become contracted and stay contracted. Patient should have access to any provider that is willing to accept the rates and be contracted with the PBM. 4) Low levels of payment from PBMs to HITs while drug costs are rising and resulting excessive profits made by PBMs are not funneled back to the patient. Finally, although drug prices are skyrocketing, non-PBM-owned pharmacies are being reimbursed drastically below cost. Meanwhile, PBMs force patients to use PBM-owned mail order and PBM-owned retail pharmacies (like CVS) in order to save on their copays. This is anticompetitive behavior that downgrades pharmacy and the seriousness of prescription medical treatment, as if buying prescription drugs were the same as buying dish soap or paper towels ..." We ask the FTC to take action: "PBMs are not the helpful, cost-savings third-party administrators they portray. They are industry middlemen profiting at every stage of the prescription drug supply chain from the manufacturers and the dispensers to the plan payers and patient. They are driving up drug prices, promoting the use of certain drugs over others, forcing medical providers to remain silent and costing patients and taxpayers tens of millions of dollars every year. The FTC's mission is to protect consumers and prevent anticompetitive business practices. On behalf of patients, drug plan sponsors and small business pharmacies who depend on trusting relationships with their patients, please intervene in these unregulated entities and break up the enormous power PBMs have over the out-of-control cost of healthcare."