The rising cost of prescription medications is a key priority for lawmakers, and for good reason. The more money patients pay for their medications, the less likely they are to fill prescriptions after they’re written. As a community pharmacist, I know patients experience worse healthcare outcomes when they walk away from the counter without the medicines they need due to out-of-pocket cost liability.
What happens behind the scenes of pharmacy transactions – and how patient expenses are determined in the process – remains largely unaddressed in the public policy conversation around drug costs and access. Medicine must be accessible and affordable for all Washingtonians, so lawmakers need to bring greater transparency and accountability to supply chain issues that are raising costs for patients and driving community pharmacists out of business.
At the heart of the matter are little known middlemen in the drug supply chain called “Pharmacy Benefit Managers”, or PBMs. Three such corporations control nearly 80% of the drugs distributed across the US, and they leverage their exceptional market position to raise costs for everyone else in the system, including patients and the pharmacists that serve them. PBMs dictate how much patients pay out-of-pocket for medicine, where they can fill their prescriptions, and whether they can ultimately access the medicine their doctor prescribes.
Systematic interference by PBMs in the drug supply chain make patients actually pay more than their insurance companies for medications and essentially pickpockets community pharmacists after each transaction. One particularly egregious example arose in Ohio, when a state auditor’s report revealed extensive abuse against Medicaid providers who serve the poorest and most vulnerable communities in the state, which forced more than 370 community pharmacies to close during a single five-year period. While one PBM ultimately agreed to pay $88.3 million to settle a lawsuit alleging overbilling of the state’s Medicaid programs for pharmacy services, the damage was already done, and many local pharmacy storefronts remained closed.
PBMs claim they are keeping costs down, but their business practices end up costing consumers more. One common PBM tactic involves overinflating co-payments for Medicare Part D generic medications, significantly raising the amount that patients pay to pharmacies. PBMs then “claw back” the inflated payments by charging the pharmacy additional fees after the transaction. As a result, many seniors on Medicare end up paying significantly more out-of-pocket when they pay for their medications, while the PBMs profit.
Here in Washington state, community pharmacists are working together with doctors and patients to push back on predatory PBM practices, including advocating for legislation to protect patient choice in their access to pharmacy services. We’re working to eliminate “patient steering,” a practice by which PBMs push patients to their own, higher cost, mail order pharmacies. Pharmacy steering practices inflate co-payments, create unnecessary barriers to care, and routinely deprive patients access to the medications they are used to purchasing at their local pharmacy of choice. Community pharmacies are often reimbursed below the cost to purchase many drugs, creating economic disincentives that impose further access barriers on patients.
While Washington community pharmacists fight to lower out-of-pocket costs in Olympia, federal action is also needed to center the needs of patients in medical decision-making processes. Our own U.S. Senator Maria Cantwell is leading with the Prescription Pricing for the People Act – which would finally bring transparency and accountability into the pharmaceutical supply chain, so we can understand exactly how much money is changing hands before medications reach patients.
We are long overdue for structural reforms that rebalance the cost equation in our nation’s healthcare delivery system to prioritize the needs of patients and the pharmacists they rely on to receive care. Lawmakers at all levels of government must work to shine a light on the darkest corners of the pharmaceutical supply chain to reveal the real drivers of rising out-of-pocket costs.
This op-ed was provided by Ryan Oftebro, CEO of Kelley-Ross Pharmacy Group in Seattle, and President of the Washington State Pharmacy Association.