Patients can’t afford Congress delaying PBM reform another year

By Robin Strongin, Senior Director of Health Policy

As the 2024 political campaigns intensify, we’re going to be hearing a lot from candidates about what they’re going to do to make healthcare more affordable. The problem is, we’re dealing with high out-of-pocket costs right now and we shouldn’t have to wait until after another election for something to be done about them, especially when the current Congress has solutions today.

As I navigate my husband’s care through his battle with Lewy body dementia and speak to other patients and their loved ones, I have become all too familiar with the practices certain players in our healthcare system use to boost their already extraordinary profits at our expense. Pharmacy benefit managers, or PBMs, are a prime example of this and we urgently need legislation to rein in their actions that are affecting both the costs we pay for care and access to the medicines our families need.

Several committees in both the U.S. House and Senate have been working on PBM reform legislation for months and there are multiple bills that could be passed now and sent to President Biden for his signature. With the time they will be taking off for campaigning, lawmakers have very few days left that they will be in Washington, D.C. this year. It would be all too easy for them to kick this can down the road and let the next Congress deal with it.

We need to raise our voices to demand that they don’t pass on this opportunity to make a difference.

There are two elements of PBM reform that could have an immediate impact on costs and prescription drug accessibility that Congress should pass without hesitation:

  • Disconnect PBM profits from drug prices. Right now, PBMs generate revenues from the rebates they demand from drug manufacturers. The higher the drug costs, the more they make in rebates and, consequently, they steer patients to medicines that cost more and block access to lower-priced generics and biosimilars. Enough is enough. Pass legislation that will have PBMs paid a flat fee for their services and remove the perverse incentives that are forcing patients to pay more and that place financial interests between patients and their healthcare providers.
  • Mandate that the PBMs pass along those negotiated rebates and discounts to consumers. Currently, these middlemen are moving those dollars into their own pockets. These savings should be going to patients at the pharmacy counter. It’s just common sense.

These are urgent issues that affect the lives and pocketbooks of millions of Americans. Yes, it’s great that politicians are making promises about how they will fix healthcare costs next year, but we need action now. Congress must pass PBM reform legislation before they adjourn this year.

Consumers and music lovers beware: My piano-moving scams saga

By Sally Greenberg, Chief Executive Officer, National Consumers League

The National Consumers League fights scams. We manage Fraud.org and James Perry on our staff is a world expert on scams.

I often tell the staff that the only recent scam I almost fell for was the piano moving scam.

Here’s how the scam works. Someone posts that their uncle, friend, brother, or parent has a beloved, very expensive, and fancy piano that needs a good home. It’s always a grand piano or baby grand piano, always “in excellent condition,” often “just tuned,” a valuable instrument, and in demand. It needs “a good home, someone who will love it like my relative/friend always has.” That person is “giving away the piano for free, all that is required to pay to have it moved.” A picture of the piano is often posted, and it is indeed a baby grand piano. A very authentic photo will often be included. The payment options are nonrefundable options. Another red flag.

Here’s a classic scam email:

Hope your day is going great. The ” Wurlitzer 200A Electric Piano” used to be owned and played by my husband who is now deceased and it was last tuned in November last year before he passed, I’m almost done moving my properties and I don’t think my husband will be happy if I was to sell his piano, at the same time I’m not happy seeing it around because of less storage I have in my new house, so I’m hoping to give it out to someone who is a passionate lover of the instrument.

The first lady I thought would get it didn’t show up as she promised, and I wasn’t going to leave it alone in an empty house. It’s currently going to be with the movers I employed to move my properties from my place, which they’ve moved for onward delivery, if you really don’t mind making new arrangements with the movers, I can attempt to get in touch with them to reroute it, this should not attract many charges. I’m sorry for the inconvenience but do let me know if you wish that I get through to the movers. Just so you know I’m not giving out a scrap or a waste. It’s in good shape and condition.

Regards,

John Doe

Family Piano has some great tips for recognizing the scam, including that no one gives a valuable piano away to strangers.

A few years ago, I got such an email and thought, “Oh boy, finally a great piano I can play and for free as long as I pay to have it moved!” So I called and was told that the owner would put me in touch with the movers. However, the piano was in Oklahoma. Hmmm, I thought this email came from someone in my synagogue, just down the street. I smelled something fishy, so I googled “piano scams,” and up popped hundreds of stories about people attempting to take advantage of a wonderful piano given away for free, paying moving costs to get it, and finding out the cost of moving the piano is the scam.

The Better Business Bureau has a whole site devoted to piano-moving scams here.

Here’s one example from the BBB site:

One consumer reported this experience after contacting the so-called moving company: “The customer service rep sent me a picture of packaged piano and asked me to pay the moving fee. They sent me an invoice for $843 and instructions on how to send the money through PayPal. They asked me to send them the receipt via email so they could prepare for the shipment. Three days later, they gave me a ‘trucking number.’ But on the morning the item should’ve been delivered, they sent me an email saying there was an unexpected payment owed on the piano and I would need to pay an additional $1,424… If not, they said they would return it to their warehouse.”

So, of course, that was the end of that. In fact, the offer I received exactly replicated many other consumers had received. I didn’t go through with the transaction, thankfully.

Then, just last week, someone named “George Hooper,” from “East Chevy Chase” posted this note on Nextdoor app:

“A friend of mine, who lives in McLean, VA, can’t take her piano with her. (George Steck – Paris, London, New York – baby grand piano. It was a practice piano at the Kennedy Center. In excellent condition.) She’s willing to give it away for free providing the recipient pays for moving the piano. Let me know if you want a pic of the instrument and the owner’s contact info, but please don’t respond to this extraordinarily good deal unless you are very serious about acquiring it.”

I hadn’t realized, though in my line of work I should have, that Nextdoor has become rife with scams and people are more trusting because they think everyone is a bona fide neighbor. Repair scams are especially prevalent on Nextdoor, such as described here on BuzzFeed.

And Nextdoor itself is posting this warning to users.

My immediate response to the offering was to warn users that this is a piano moving scam and not to fall for it. This George Hooper, whoever he is, became irate and said I had “poisoned” his benign email. He then listed the name of the woman with the piano and phone her number was a Northern Virginia area code. I called her and she confirmed she had the piano and I could come and look at it, but she would have to get me through security. Then I asked whether I could get my own movers and her response was, “Yes, well I have to get it tuned and I have a moving company that has moved it twice and it has legs so it’s complicated.”

It all sounded so believable, but I was still suspicious.

It occurred to me that if you’re giving away a piano for free and it is going to be moved, why would you get it tuned?

A few people said they wanted the piano and George said, “It’s gone. I’ll send a photo of the person who bought it who can play a concert for you once it has been delivered.” That’s the last we heard.

So I went online and read the thousands of piano moving scams, such as this story. The lengths they will go to!

This article points out all the red flags for piano moving scams. Be wary of them and be wary of people like “George Hooper”!

Stopping the epidemic of catalytic converter theft

By Sally Greenberg, Chief Executive Officer, National Consumers League

For many years, I drove a 2007 Toyota Prius. I loved my little fuel-efficient and quiet machine, getting 45 mph and putting almost 189,000+ miles on it. All went well until one night a few years ago when—being an insomniac, I was up reading at 3 am—outside my window I heard what sounded like someone taking bolts off a tire, a loud buzzing or whirring sound. It lasted about 5 minutes. I thought some kindly father or uncle was putting air in a kid’s tire or changing a flat.

The next morning when I headed out for work, I started up my Prius, and to my shock, it sounded like a jet engine driving down the street! It dawned on me that the sound I heard last night was guys cutting the catalytic converter (CC) off my Prius! To borrow a phrase my mother used to say, I was mad as a wet hen!

 So I called my insurance company.

And, sure enough, they confirmed that 2005-2009 Priuses are a prime target because their CCs have precious metals that can be melted down and sold by unscrupulous actors. The CC is used to filter out harmful byproducts from the car’s exhaust, using precious metals like platinum, palladium, and rhodium to accomplish this. These metals can sell for hundreds to thousands of dollars per ounce.

While my auto insurer, State Farm, thankfully covered most of the replacement cost, I had to cancel going to work. I couldn’t drive the car so I had to have it towed to my garage seven miles away. I ended up paying for a shield to be placed on the CC to prevent it from happening in the future. In total, I was out of pocket $1,000 while the repair cost more than $3,500.

According to State Farm, the average cost of a repair comes in at around $2,900. As of October 2023, $41.7 million had been paid out to State Farm customers to repair and replace the part. In addition to the cost of replacement, customers report that repairs can take weeks to months, depending on the vehicle and due to a shortage of available replacement parts. Used vehicle lots are bearing a large brunt of this wholescale theft and insurance companies are also paying needless costs.

Ever since my catalytic converter incident, I’ve taken a closer look at this issue and learned that there is no legitimate use for a sawed-off CC because it cannot be used in another vehicle. The only thing it’s good for is its melted-down metals. Thus, the business model is illegal. In other words, there are bad guys on both sides—the theft rings and those who accept and pay for the scrap metal for melting down.

The good news is that in the first half of 2023, claims are down. There were around 14,500 claims filed then, compared to the 23,000 claims made during the same timeframe in 2022.

Carfax, however, issued a warning that the nation might be underestimating how widespread the problem is because many car owners don’t file insurance claims. Some drivers don’t have full coverage on older vehicles and some don’t have insurance at all.

That is why we welcome efforts by Congress to pass laws to deter catalytic converter theft. The bills introduced so far in the House and Senate include marking the part with a unique number and requiring the identity of those selling and buying the CC. NCL supports both!

H.R. 621, the PART Act,  was introduced by Reps. Jim Baird (R-Ind.), Betty McCollum (D-Minn.), Angie Craig (D-Minn.), Randy Feenstra (R-Iowa), and Michael Guest (R-Miss.). S. 154 was introduced by Sens. Amy Klobuchar (D-Minn.), Mike Braun (R-Ind.), Ron Wyden (D-Ore.), and J.D. Vance (R-Ohio).

We are working with the National Auto Dealers Association and 20 other organizations who all sent a letter to the leadership of the House and Senate Commerce Committees in support of the PART Act in May. NCL urges members to cosponsor H.R. 621/S. 154.

As for me, I replaced my 2007 Prius last summer with a new Prius Prime, whose CC is relatively worthless in terms of precious metals. I love my new car and am so relieved to know it won’t be a target for thieves in the night.

NCL looks forward to working with Congress to pass the PART Act, which will protect consumers and insurance companies from the hassle and expense of catalytic converter theft.

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Resources:

Issue Brief

Request to Cosponsor

Current Cosponsors

Coalition Letter to Commerce Committees

 

 

Not so fast, PBMs: You aren’t fooling consumers

By Robin Strongin, Senior Director of Health Policy

A recent op-ed, “It’s Time for Facts in the PBM Debate” by the president of one of the nation’s largest pharmacy benefit managers (PBMs), is at odds with the reality of what consumers are facing when we go to the pharmacy.

In his commentary, David Joyner paints a rosy picture of how the largest PBMs lower drug prices. Meanwhile, consumers across the country are being hit with higher out-of-pocket costs and a lack of understanding about what goes into the costs for their medicines. This opaque system results in consumers running into several issues trying to access more affordable drug options.

The PBMs aren’t fooling anyone.

In Joyner’s own company, a whistleblower brought suit over the PBM’s scheme to keep lower-cost generics off its formularies for Medicare beneficiaries, pushing seniors to more expensive drugs (for which the PBM had negotiated higher profits for itself). The whistleblower said she was told by company executives that the financial benefits of this manipulation outweighed the possibility of getting caught.

More recently, community pharmacies in Iowa filed a lawsuit against CVS Health and its Caremark PBM claiming that they violated antitrust laws and illegally collected fees from pharmacies filling Medicare prescriptions. We’ve seen this behavior often force trusted, and long-established local pharmacies out of business.

What’s most concerning is that such questionable PBM behavior can have tragic results beyond pharmacy closures. In Wisconsin earlier this year, a young man with severe asthma died after he was informed at the pharmacy that his inhaler was no longer covered by insurance and he couldn’t afford the hefty out-of-pocket cost.

We can’t let this happen to another person. Consumers deserve more transparency. They deserve accountability in this middlemen PBM system. Most of all, we all deserve better than to be inundated with large PBM falsehoods.

Even as these mega-PBMs assure us that they are patient advocates, they are fighting tooth and nail in Congress and state legislatures to block measures that would take the necessary steps to ensure that consumers – and not the PBMs themselves – actually benefit.

Those are the facts in the big PBM debate.

Honoring the legacy of Cesar Chavez

By David G. Oddo, retired teacher and a former volunteer with the Child Labor Coalition

I have been an enthusiastic supporter of Cesar Chavez and the farm worker movement since 1968. In September of that year, I was a freshman at the University of San Diego High School and the United Farm Workers-led grape boycott was in full swing. One day, my father handed me a “Boycott Grapes” button and he told me I should wear it to school. When I asked my father how I should respond to questions regarding the boycott, he calmly told me: “Tell your fellow students that you like to eat grapes, however, you do not like the way in which farm workers are being treated.”

Eight years after surviving my first “baptism under fire,” I became an active participant in the farm workers’ nonviolent struggle for social justice. During the period of 1976-1991, I marched with Cesar Chavez, walked dozens of picket lines, and spent two weeks in Ohio as a volunteer with the Farm Labor Organizing Committee. I also had the privilege of meeting Cesar on two occasions. In September 1991, however, disaster struck.

While vacationing in Puerto Vallarta, I became seriously ill with a neurological condition known as Guillain-Barre Syndrome. Within a week, I had become completely paralyzed and was in danger of losing the ability to breathe. I was immediately airlifted to the intensive care unit of Scripps Mercy Hospital, where I nearly died due to complications from my illness.

Fortunately, my condition gradually improved. After a seven-month stint at Mercy and Sharp Rehabilitation hospitals, I was able to return to my home in San Diego. However, the next several years were spent confined to a wheelchair. As well, I faced the daunting task of relearning to walk.

To be completely honest, I don’t know how I survived those difficult times. I am certain that my faith in God was essential to my recovery. The love and support of my family and friends were equally important. Perhaps I was just plain stubborn, especially after being told by my doctors that I would never again be able to walk.

During those difficult days, I would often think of the accomplishments of Cesar Chavez and the farm worker movement. For example, the banning of dangerous agricultural pesticides such as DDT, the elimination of the infamous short-handled hoe, and the enactment of a collective bargaining law for California farm workers. Perhaps the most enduring legacy, from a personal perspective, was the “Si Se Puede” (Yes, it can be done) attitude of the farm worker movement. This was a source of inspiration as I was recovering from my illness.

It has been nearly 18 years since I became seriously ill. However, I am vastly improved. Despite daily challenges and numerous setbacks, I am currently able to walk with the aid of a walker and a quad cane. And the wheelchair? It is collecting dust in my condo’s storage area. More important, I am now physically able to rejoin the struggle for farm worker justice. I realize that I have a difficult journey on the road to recovery. And there is much work to be done with regard to our nation’s agricultural workers. Indeed, the vast majority still labor under hazardous conditions, earn poverty-level wages, and are excluded from the benefits of collective bargaining agreements. Child labor is widespread.

As I move forward with these challenges, it is my hope that the spirit of Cesar Chavez will guide me on my journey.

Nancy Glick

It’s time to care about obesity care

Nancy GlickBy Nancy Glick, Director of Food and Nutrition Policy

Every year, the calendar is full of national health observances – special months, weeks and days that raise awareness of serious diseases and health issues. While all are valuable to advance the health of the Americans, Obesity Care Week taking place March 4-8 is especially significant.

Why?  Because even though the adult obesity rate now exceeds 42 percent – the highest level ever recorded – obesity is still viewed as a problem of lack of willpower, too many health professionals act in discriminatory ways based on people’s size, and those seeking obesity care often face exclusions in insurance plans or restrictive practices that delay or deny treatment.

The consequence is that that only 10 percent of people with obesity get help from medical professionals, meaning the disease remains largely undiagnosed and undertreated.

It doesn’t have to be this way. There are a variety of safe and effective treatment options. And medical societies, including the American Medical Association (AMA), agree that obesity is a complex disease requiring ongoing quality care. The key is for society – including health professionals, insurers and policymakers – to care about obesity and agree that treatment matters. Here are the reasons why.

It is long past time for health professionals, employers, insurers, policymakers and the American public to care about obesity and work collectively to break down the barriers that prevent people from accessing proper care and treatment. This is the purpose of Obesity Care Week – to shine a light on a disease that no one has wanted to talk or think about and shift the way society views obesity and treats the disease.

Obesity Care Week is also an opportunity to call attention to the first Obesity Bill of Rights for the nation, developed by NCL and the National Council on Aging in consultation with leading obesity specialists and issued in January 2024. Starting with the recognition that obesity is a treatable disease, the Obesity Bill of Rights establishes eight essential rights so adults will receive the same level of attention and care as those with other chronic conditions and have access to all treatments deemed appropriate by their health providers. Now is the time to advance changes in federal, state, and employer policies that will ensure these rights are incorporated into medical practice.

More information about the Obesity Bill of Rights is available at: www.right2obesitycare.org.

The 340B drug discount program should be helping patients in need, not boosting pharmacy chain profits

By Sally Greenberg, Chief Executive Officer, National Consumers League

The federal 340B drug discount program is a worthy and critical program. Created by Congress in 1992, it mandates that pharmaceutical manufacturers participating in the Medicaid program must offer prescription medicines at discounted rates to community health centers and safety-net hospitals serving low-income and uninsured patients. Over the years, this program has given vulnerable patients access to the drugs they need and freed up resources for the qualified facilities to offer more health care services to indigent communities.

Over the past decade or so, however, this valuable program has been increasingly corporatized by for profit entities known to increase costs for consumers including middlemen like pharmacy benefit managers and pharmacy chains. Too many of the dollars circulating through the 340B program are benefiting the well-off and for-profit corporations, instead of consumers with significant health and financial needs. News stories have shined a spotlight on big health systems using the program to bolster profits, while hallowing out critical resources in underserved areas. However, more attention needs to be given to the billions of 340B dollars going to major pharmacy chains like CVS, Walgreens, Walmart and Rite-Aid that are not benefiting the patients this program is intended to serve. Increasingly, however, policymakers at the federal and state level are suggesting bailing out these for-profit entities under the guides of “contract pharmacy” legislation.

Here’s the problem: In 2010, the federal government issued guidelines allowing 340B-eligible health providers to contract with for-profit retail pharmacies to dispense medications, with virtually no rules or safeguards. Since that time, the number of pharmacies participating in the 340B program has grown from 789 in 2009 to over 25,000 today. If this meant more access to affordable drugs for consumer, that would be one thing, but this has not been the case. As contract pharmacies have increased, so too has consumer challenges affording their medicines, nearly in parallel. For example:

  • Even though 340B contract pharmacies are receiving drugs at discounted prices, there is no evidence they are passing those savings onto consumers. One analysis from the respected IQVIA firm found that 340B discounts were shared with consumers in only 1.5 percent of eligible pharmacy claims.
  • Although the 340B program is intended to benefit underserved, vulnerable communities with high proportions of poor and uninsured patients, hospitals in the program are contracting with pharmacies that are not, in fact, in areas afflicted with poverty and a scarcity of health care services.
  • The vast majority of 340B contract pharmacy arrangements are with the aforementioned big national chains like CVS and Walgreens, which are enjoying enormous profits as a result of their participation in the drug discount program. Contract pharmacies collected an estimated $13 billion in gross profits in 2018, with a 72% profit margin on 340B drugs (because they are getting those drugs at a steep discount, which they don’t share with consumers). Needless to say, fattening corporate pharmacy profits should not be this program’s mission.

Contract pharmacy abuse of the 340B program has not gone unnoticed by policymakers in Washington. In January 2024, leaders in the U.S. Senate questioned CVS Health and Walgreens as part of as part of an ongoing investigation into how health care entities use and generate revenue from the 340B Drug Pricing Program. The Government Accountability Office (GAO) and the Department of Health and Human Service Office of the Inspector General (OIG), also highlighted issues with the program’s integrity as it relates to contract pharmacy use. 340B is in desperate need of transparency and oversight, not unfettered expansion.

Yet that is exactly what is happening in some U.S. states. This matter is taking on a greater urgency now as several states are contemplating legislation that doubles down on the problem instead of fixing it. Consumers would be shocked to learn their state representatives are ushering through changes that would further solidify the profitable role these large corporate contract pharmacies are playing in the abused 340B program. Policymakers at the state and federal level need to address a fundamental question – where do 340B savings go? And when the answer is to corporate pharmacy giants – not patients – it’s time to reconsider ill-conceived policies giving contract pharmacies even more access to 340B drug discounts.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

Copycat versions of expensive drugs may look the same, but the impact on consumer pocketbooks is far from identical

By Sally Greenberg, Chief Executive Officer, National Consumers League

To a scientist, a biosimilar medicine is designed to work like a brand-name medicine, with the molecular structure operating in a highly similar way in both therapies. The biosimilar medicine looks the same to a doctor, too, who can expect similar clinical results.

For many patients, though, the cost of the two medicines hit the pocketbook in hugely different ways. Today, many insurance plans ask patients to pay a percentage of the list price of certain medicines out of pocket – a practice called “coinsurance” – rather than a flat copay.

Even if that coinsurance percentage is the same no matter the drug, patients can pay vastly different amounts if one drug has a higher list price than another.

This has become a quiet crisis for patients using the anti-inflammatory medicine Humira, the best-selling medicine in history. Humira carries a list price of about $7,000 a month, though insurance companies, through savvy negotiation, pay far less.

For patients with coinsurance – the specifics vary by insurer, but it’s usually around 25% of a medicine’s list price, with some plans setting a maximum per-prescription price – that could add up to more than $1,500 a month out of their own pockets to get a medicine they cannot do without. That’s a huge burden, but not a huge surprise to those who have witnessed their health insurance benefits become less and less generous.

Fortunately, there are new options. Biosimilar versions of Humira are now available that have a list price of close to $1,000 a month. For patients with a 25% coinsurance, the medicine costs $250 out of pocket.

That should be a no-brainer for consumers. Who wants to pay six times more?

Unfortunately, due to our ultra-complicated health care system, almost no one uses the cheaper biosimilar. In part, that’s because insurance companies like more expensive medicines because they can make more money from these drugs, and there are few policies in place designed to protect patients from this kind of behavior.

Doctors, too, may miss opportunities to offer patients lower-cost options. After all, when the brand-name product and biosimilar are both technically “covered” by a patient’s insurance, it seems like it shouldn’t matter which product is selected.

The truth is that because insurance benefits are all over the place, it does make a difference for some patients. A huge difference. Thousands of dollars’ worth of difference.

The good news is that there are efforts that can make this easier for consumers and their physicians. Industry, government, and advocates can commit to boosting education so that more Americans can understand their health plan.

Such an educational effort could also include a focus on coinsurance to ensure that no consumer ever gets surprised when they have to pay a percentage of an inflated cost.

But educational efforts only go so far. We cannot rely on solutions based around asking doctors and consumers to assume primary responsibility for navigating a broken system. Fixing this problem for good requires policymakers to act.

First, Congress needs to address the role the pharmacy benefit managers – the middlemen known as “PBMs” that determine how drug benefits are designed – have played in creating the distorted market structure that has led to health plan strategies designed to push costs onto consumers.

Bipartisan legislation has been introduced that would begin to correct this convoluted market and put an end to patients needlessly overpaying to pad the profits of PBMs, but congressional leaders need to prioritize reform. There may be few areas of consensus on Capitol Hill, but this is one of them, and it’s time to turn good ideas into law.

Second, meaningful market incentives need to be established to drive biosimilar uptake. This happened in the generics market decades ago, where clear incentives have driven generic drug penetration to the point where 91% of all prescriptions are for generic drugs.  Unlike biosimilars, patients who take generics see clear cost savings, which is a great motivator.

But no such incentives exist in the U.S. biosimilar market, offering an opportunity for Congress to create similar incentives where both patients and physicians share in the savings available from these lower-cost biosimilars.  Only then will consumers, and the U.S. health care system more broadly, realize the enormous potential of a sustainable biosimilars market.

Our health care system is complicated on purpose. Complexity makes it hard for consumers to see good deals, even when they’re right in front of them. That’s the scenario playing out with biosimilar versions of Humira: even if the drugs may be the same, the impact on patients may not be.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

PBMs claim new programs will save consumers money. Let’s take a closer look.

By Robin Strongin, Senior Director of Health Policy

Consumers have known for quite some time now that the prescription drug pricing system is essentially a black box. Dealings among drug manufacturers, health insurers and pharmacy benefit managers (PBMs) establish which drugs insurance will cover and make accessible to consumers. What’s more, the prices that consumers pay for those medicines vary wildly – often leading to high out-of-pocket costs for us all.

Two of the three major PBM companies that are in the middle of this drug pricing web recently announced that they are establishing new programs (CVS’s CostVantage and Express Scripts’ ClearNetwork) that set transparent formulas for drugs with a pre-set markup and a flat fee for the PBMs. On paper, this sounds like a great idea.

But consumers would be wise to take these claims with a healthy grain of proverbial salt. We know PBMs continue to find new ways to put themselves over patients (more on that here) and we must demand answers to the issues the PBMs are still skirting. For example:

  • Will these new programs actually make prescription drugs more affordable and reduce out-of-pocket costs at the pharmacy counter? Notably, both Express Scripts and CVS Health have acknowledged that employers and plan sponsors may not save any money from this move. There is no sign either that consumers will be able to get the drugs they need for a fair price.
  • While the companies boast increased transparency, they still have not shared – nor said they will share – how much they are paying to acquire the drugs that will be dispensed to patients. PBM clients have long sought this information, but it appears that data will still be hidden in the black box.
  • In the case of CVS Health, the changes the company announced will only be effective at CVS-owned pharmacies. It will not affect how CVS will reimburse millions of prescriptions at the local and independent pharmacies it doesn’t own. A cynic might say this is just another mechanism by CVS to drive more patients to its own pharmacies.

Most notably, nothing CVS Health and Express Scripts have announced will change one of the pervasive anti-consumer elements of the drug pricing system. In their dealings with drugmakers, they can still cut deals that will determine which medicines get preferential placement. This means PBMs could continue to push consumers toward higher-priced drugs and limit access to more affordable generics and biosimilars.

It’s no coincidence that Congress is getting closer to passing PBM reform legislation that would mandate transparency, force the PBMs to pass their negotiated savings from drugmakers to consumers and remove the incentives for PBMs to push consumers to higher-priced drugs. One might say that these moves by CVS and Express Scripts are cosmetic attempts to ward off legislation by touting their own self-reforms.

But, as with so much that goes on in the drug pricing game, these “reforms” may not be what they seem. We need Congress to step in for consumers to help ensure we’re no longer facing a big disadvantage at the pharmacy counter.

Learn more about the PBM problem at nclnet.org/pbms.

Congressional briefing: The path forward for a safe cannabis marketplace

By Robin Strongin, Senior Director of Health Policy

Cannabis Consumer Watch recently hosted a briefing on Capitol Hill to educate policymakers and staff on the public health risks that exist in the current cannabis marketplace, and to offer policy solutions that would help protect consumer safety and encourage innovation for patients. The briefing was moderated by the Collaborative for Cannabinoid Science and Safety’s Libby Baney, and the panel of experts included:

Robin Stronger, Senior Director of Health Policy, National Consumers League, who explained NCL’s biggest concerns about the current cannabis marketplace. She pointed out, “Out of over 140 CD products studied by the FDA, more than half were mislabeled and nearly 40 of those products had more than 120% of the CBD level listed. Several had pesticides and even toxic mold – we just don’t know what consumers are buying. And consumers aren’t aware of the risks.”

Dale Sutherland, President & Founder, CODE 3, who shared that during his time with DC Metropolitan Police Department, they saw, “how bad distribution efforts can be – product manufacturing and transportation conditions that aren’t heavily regulated present several unique health risks.”

Sue Thau, Public Policy Consultant, CADCA highlighted the negative effects cannabis products have on children in particular, explaining, “Poison control calls related to cannabis digestion are increasing each year – and that’s just the data that we do have – there isn’t an efficient way to track all the issues parents and families face.” She provided examples of THC products that use packaging similar to popular children’s snacks or are in packaging that appeals to kids.

From consumer health to law enforcement, to concerns around youth consumption, the unique backgrounds of the panel made for a robust conversation that included multiple perspectives on the cannabis issue. To learn more about the concerns highlighted during the discussion, visit our Cannabis 101 page here.