NCPA testifies on ‘undue influence’ of PBMs

Wednesday, November 18, 2015

WASHINGTON – National Community Pharmacists Association President Bradley Arthur testified at a Nov. 17 hearing on the “disproportionate market power” of pharmacy benefit management corporations.

Arthur told members of the House Judiciary Committee Subcommittee on Regulatory Reform, Commercial and Antitrust Law that PBMs have “undue influence” on patients, health plans sponsor and pharmacies.

Arthur, a pharmacist, is co-owner of Black Rock Pharmacy and Brighton-Eggert Pharmacy in Buffalo, N.Y.

“I can tell you that as a small business owner and health care provider, the current situation and overall business climate that exists in which market power is increasingly concentrated in an ever-shrinking number of corporations makes me apprehensive about what is around the bend,” he testified.

Among Arthur's key points:

• Three corporations, express scripts, CVS health and OptumRx, cover approximately 78% of patients managed by PBMs.

The criteria PBMs use to determine multi-source generic drug MAC (or “maximum allowable cost”) reimbursements are unknown, which means that for approximately 86% of the prescriptions dispensed by small community pharmacies, pharmacists are unable to make informed business decisions on fundamental matters such as expected cash flow and drug inventory;

• Small community pharmacies lack leverage and are saddled with “take it or leave it” contracts with PBM corporations that include onerous terms that can threaten their financial viability;

• PBM corporations have conflicts of interest through ownership of mail order and specialty pharmacies, often incentivizing or requiring patients to use such pharmacies when many patients prefer to use a community pharmacy.