Behind inflated prescription prices, complicated insurance plans and dying local pharmacies, there is a little-known culprit: pharmacy benefit managers that operate as self-serving middlemen between drug manufacturers, insurance companies and you. Now my home state, Arkansas, is taking action against them.
I am proud to be the first governor in the country to ban the anticompetitive practices that allow P.B.M.s to dominate the prescription drug market, and to encourage other states and Congress to follow Arkansas’s lead.
P.B.M.s started as a good idea that quickly went sour. They initially served as negotiators between pharmacies and insurance companies. P.B.M.s are supposed to keep track of fast-changing drug prices, insurance plans and government regulations, and are intended to keep patient costs low and prescriptions filled. But anyone who has had to pay an insurance premium or co-pay recently likely knows they don’t always work as intended.
Instead, some of these P.B.M.s opened their own pharmacies and others were acquired by existing pharmacy chains, in both cases creating huge conflicts of interest. The result: P.B.M.s forcibly steer patients away from independent operators and inflate drug prices in the vacuum left behind. That consolidation has only hastened in recent years. Today the nation’s three largest P.B.M.s process 80 percent of all prescriptions, and their affiliated pharmacies bring in 70 percent of all specialty drug revenue. They bring in steep profits, too: Pharmacies associated with the nation’s largest P.B.M.s received $1.6 billion in excess revenue from just two cancer drugs in under three years.
Especially in places like rural Arkansas, that puts patients at risk. I heard from one woman in Camden, Ark., who was a longtime patient at a community pharmacy where she always picked up her prescription in person.
But when she developed a life-threatening breathing disorder that required an inhaler, she ran into problems with her health plan, which is administered by one of the largest P.B.M.s in the country, CVS Caremark. When it came time for her routine refill, her claim was denied. She was told she had to use one of CVS’s pharmacies (which share a parent company with the P.B.M.), the closest of which was an hour and a half drive away.
She had three options: drive three hours round-trip, pay hundreds of dollars out-of-pocket at her trusted local pharmacy or risk enrolling in mail-order prescriptions.
She reluctantly chose mail-order, which required jumping through various hoops, including a new doctor’s appointment and onerous paperwork, only to encounter delays that left her without an inhaler for weeks. After finally getting an inhaler, she went to refill the prescription and was told it was no longer covered mail orders.
This red tape isn’t just annoying; it’s also life-threatening. And the only purpose it serves is to line the pockets of corporate suits who stand between patients and the care they need.
Arkansas is fixing this problem. The legislation I just signed makes it so that a P.B.M. cannot also own a pharmacy. They can still operate in our state; they just can’t continue to mistreat patients and box out other pharmacies.
Not surprisingly, these multibillion-dollar companies are engaging in an all-out broadside against our new law. CVS flooded Arkansas airwaves with hair-on-fire ads before the legislation was signed. Now, CVS is threatening to close down every pharmacy it operates in our state — preferring to take its ball and go home rather than divest from its P.B.M. and actually serve the patients it claims to care about. (A spokesman for CVS Health said that the Arkansas law would hurt competition and lead to higher drug prices, and that the company is evaluating options to keep stores open.)
CVS and another major P.B.M., Express Scripts, are using all the legal firepower their money can buy to take Arkansas to court. And I have no doubt that lobbyists in other states and Washington, D.C., are about to make a pretty penny representing these panicked corporations.
Arkansas isn’t scared. We won’t sacrifice our veterans, seniors or rural patients in service of P.B.M. stock prices.
If you’d asked me a year ago if we could change these entrenched interests, I’m not sure I would have thought it possible. But with President Trump in office, everything is changing. He signed an executive order last month that targets P.B.M.s. “We’re going to cut out the middlemen,” he promised in a recent news conference.
Republicans have a chance to lead on this issue — but we have to act now. My fellow governors and congressional lawmakers should ignore the fear mongering from P.B.M.s and stand up for patients and local pharmacists to end these anti-competitive practices and fix the broken, backward system that has tarnished America’s health care for too long.
Sarah Huckabee Sanders is the governor of Arkansas.
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