* Press release from yesterday…
Majority Leader Greg Harris, D-Chicago, is joining state Sen. Andy Manar to announce their efforts to rein in unfair insurance programs and regulate pharmacy benefit managers that dramatically increase out-of-pocket costs for patients at a press conference and rally on Wednesday March 13 at 2 p.m. in the Capitol Rotunda.
“We need to put access to quality, affordable care over the bottom line of corporations,” Harris said. “The status quo is clearly broken when patients are seeing the out-of-pocket cost of their lifesaving medications more than double, simply due to unfair practices that help boost profits at the expense of patients.”
Harris introduced an amendment to House Bill 465, which makes various reforms aimed at lowering prescription drug costs for patients in Illinois. Harris’ measure defines and regulates pharmacy benefit manager (“PBMs”) practices within the State of Illinois; requires pharmacists to inform customers of a less expensive drug product for their prescription; protects consumers entering the emergency room from having coverage of treatment rejected; and prohibits insurers from adopting “copay accumulator programs,” that prevent manufacturer copay cards from reducing out-of-pocket expenses for patients.
“PBMs are billion dollar corporations that are currently operating with no oversight in Illinois,” Harris said. “Over 25 states have begun regulating PBMs including Indiana, Kentucky and Texas. It’s time for us to do the same in Illinois and create protections that will level the playing field and help reduce drug costs for patients.”
* Peter Hancock with Capitol News Illinois…
PBMs generally work on behalf of health insurance plans to negotiate drug prices and develop what are called “formularies” — rules that determine what drugs will be covered for particular conditions, and in some instances, under what conditions those drugs will be covered.
In addition, in the case of high-cost drugs, PBMs will often set a “maximum allowable cost” that limits how much pharmacies will be reimbursed for a particular drug.
Independent pharmacies complain those maximum allowable costs are often less than the wholesale price they pay to manufacturers to obtain the drug. They also allege that certain PBMs have direct ties to large, retail chain pharmacies, such as CVS Health, which operates the nation’s largest chain of retail pharmacies and provides pharmacy benefit management services. […]
“We agree with … Harris that more can be done to address rising drug prices,” [an association that represents PBMs, the Pharmaceutical Care Management Association] said in a statement. “However, legislation HB 465, promotes the special interest agenda of the independent drugstore lobby while having adverse effects on drug costs for Illinois consumers.”
The association has also argued that it is not to blame for the closure of small, independent pharmacies. Those pharmacies, it said, are at a natural competitive disadvantage because they do not have the purchasing power to negotiate the same kind of prices with wholesalers that PBMs can negotiate.
* WAND TV…
Independent pharmacies in Illinois argue they are paid very little in dispensing fees for prescription drugs and often prices and fees eat up their profits. They warn that unless the legislature takes action many independent pharmacies will disappear which has happened in Lincoln and Logan County.
“If they are allowed to continue this practice, and allowed to stamp out competition, and drive prices up we should only expect that there are going to be fewer pharmacies as time goes on,” said Senator Manar.
In the past year independent pharmacies have closed in Lincoln, Taylorville and Mt. Zion.
* More context…
The Springfield-based Illinois Pharmacists Association says many owners of the state’s more than 500 independent pharmacies and smaller chains are being paid less than the “acquisition cost,” or wholesale cost, of the medicines they dispense to Medicaid patients.
Garth Reynolds, executive director of the association, says pharmacies also have seen their per-prescription “dispensing fee” from Medicaid, a fee designed to cover professional services, drop from $5.50 for generics and $2.40 for name-brand drugs under the previous “fee-for-service” system to the current 45 cents per prescription.
Advocates for managed-care organizations and PBMs say the managers save states money in their Medicaid systems. But advocates for pharmacy owners say Illinois’ less-than-transparent managed-care contracts conceal what may be unfairly high profits by PBMs that are being earned at the expense of independent pharmacies.
And because at least one PBM, CVS Caremark, is owned by the huge chain that operates CVS pharmacies, independent pharmacies say Caremark’s rate cuts may be designed to put independents out of business.
That CVS Caremark issue is huge.
* And this talking point from the PBM industry is probably not helping the industry deal with the lobbying by independent pharmacies…
Repeal any willing pharmacy provisions. Requirements that all pharmacies be included in Part D networks drives up costs and are unnecessary, given the network adequacy requirements. Congress should repeal the provision. A recent study showed that greater use of limited network pharmacies in Part D could generate $35 billion in savings over 10 years.
Everybody has pharmacies in their legislative districts. And many constituents love their local pharmacists. They are a potent force, but they’re rapidly declining.