WASHINGTON, D.C. – In comments submitted to the Federal Trade Commission (FTC), the American College of Rheumatology (ACR) urged the agency to address Pharmacy Benefit Manager (PBM) business practices that drive up costs and reduce access for the 54 million Americans living with rheumatic disease.
“The FTC’s decision to study PBM business practices is an important step toward enacting meaningful reforms that reduce costs and expand access to important therapies for our patients,” said ACR president Kenneth Saag, MD, MSc. “While PBMs were originally conceived to help manage the complexities of prescription drug benefits, they have since become massive, consolidated, profit-driven enterprises that exercise immense control over patients’ access to needed treatments. Their opaque business practices are detrimental to policy efforts to curb the high cost of prescription drugs. Without greater oversight of PBMs, it will be impossible to enact effective drug pricing reforms.”
The FTC announced in February that it would be soliciting public input on the ways the business practices of PBMs impact prescription drug affordability and access. According to the agency, this information will be used to inform its policy and enforcement work.
In its comment letter, the ACR highlighted several ways in which PBM business practices negatively impact patients:
Rebates and fees drive up prescription drug costs. By intentionally designing formularies that seek to maximize rebates from manufacturers (a significant portion of which are kept by the PBM as profit), PBMs increase drug costs for patients. As manufacturers compete with one another to ensure that their drugs are on the formulary, they increase list prices in order to offer higher rebates to the PBM. As a result, formularies are developed with the goal of maximizing revenue for PBMs, rather than promoting clinical efficacy and outcomes.
Patients are then saddled with higher out-of-pocket costs since most insurer cost-sharing requirements for specialty drugs are based on a drug’s list price.
PBM-imposed access barriers, such as step therapy and prior authorization, delay and deny necessary care for patients. Common “utilization management” tools – including step therapy and prior authorization – that PBMs use to control the use and cost of specialty drugs cause unnecessary delays in patients’ ability to access appropriate treatment. According to a survey by the American Medical Association, 34% of surveyed providers report that prior authorizations have contributed to severe adverse events for patients in their care. Furthermore, step therapy – which forces patients to try, and fail, an insurer-preferred treatment before being allowed to access the treatments their provider initially prescribed – hinders patient access to care. Step therapy can significantly delay access to the most appropriate treatment while requiring patients to unnecessarily suffer by taking less effective medications that do not sufficiently manage their disease.
PBMs create administrative burdens for clinicians and take valuable time away from patient care. The amount of unnecessary time and labor it takes to complete prior authorization requirements is a major burden on clinicians. According to a survey from the AMA, 88% of providers deem prior authorization a significant or extreme burden and many practices are forced to employ dedicated staff to handle these requests and appeals.
“The ACR firmly believes that drug pricing reforms are necessary to ensure the health of our patients and the sustainability of our health care system. We commend the FTC for soliciting public input on this important issue and welcome the opportunity to be a resource to the FTC as it continues to further study PBM business practices,” said Dr. Saag.
The ACR’s full comment letter can be viewed online here.
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About the American College of Rheumatology
Founded in 1934, the American College of Rheumatology (ACR) is a not-for-profit, professional association committed to advancing the specialty of rheumatology that serves over 7,700 physicians, health professionals, and scientists worldwide. In doing so, the ACR offers education, research, advocacy and practice management support to help its members continue their innovative work and provide quality patient care. Rheumatology professionals are experts in the diagnosis, management and treatment of more than 100 different types of arthritis and rheumatic diseases.
