National Consumers League statement on FTC action against Big Three PBMs

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September 20, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

WASHINGTON, DC – The National Consumers League (NCL), America’s pioneering consumer advocacy organization, today applauds the Federal Trade Commission (FTC) for bringing action against the three largest prescription drug benefit managers (PBMs) and affiliated group purchasing organizations (GPOs). The FTC’s administrative complaint states that PBMs have engaged in anticompetitive and unfair rebate practices, inflating the list prices of insulin, lining their pockets, and transferring the costs to patients.

The following statement is attributable to NCL’s Chief Executive Officer Sally Greenberg:

“We applaud the FTC for its continued actions and investigation into PBMs. This latest action reinforces the role PBMs play in creating consumers high out-of-pocket costs of medicines consumers face. Caremark Rx, Express Scripts, and OptumRX administer four-fifths of all prescriptions within the states, and prioritizing their profits over the patients’ wellbeing directly impact why 25 percent of insulin patients are unable to afford their medication.”

The FTC’s press release about the administrative complaint can be read here.

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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 www.nclnet.org.

PBMs are driving the increase in out-of-pocket healthcare costs for consumers, says NCL

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July 23, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

WASHINGTON, DC – The National Consumers League (NCL) today submitted a letter to both the Republican and Democratic chairs of the House Committee on Oversight and Accountability expressing concerns about pharmacy benefit managers (PBMs) driving the increase in out-of-pocket healthcare costs for American consumers. The letter was submitted just as the committee was conducting a hearing with top executives from Express Scripts, CVS Caremark, and Optum Rx.

The following statement is attributable to NCL’s Chief Executive Officer Sally Greenberg:

“We are concerned that these anti-consumer practices are putting the profits of insurance companies and their PBMs before patients, local pharmacies, employers, and state governments. Congress has an opportunity to review these corporate practices and work to ensure a reduced market power, thus minimizing the incentives for PBMs to steer patients towards higher-priced medicines, claim higher and higher rebates to fatten their bottom line, and ultimately driving independent pharmacies out of business.”

The full letter can be accessed here.

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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 www.nclnet.org.

New insurance schemes to carve out specialty drugs deserve skepticism and scrutiny

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Sally Greenberg

By Sally Greenberg, Chief Executive Officer

Employers seeking to cut healthcare costs should remember this simple rule of thumb: If an offer to save money seems too good to be true, it usually is. That seems to be the case with offers to try “Alternative Funding Programs” or AFPs.  This is a devious but growing cottage industry, which promises to cut employer costs for specialty medicines.

Specialty medicines are used to treat complex, chronic conditions like cancer and rheumatoid arthritis; they are drugs often offered to some of the sickest patients. While they represent a mere 2 percent of prescriptions, they add up to half of the estimated $500 billion spent each year in the U.S. on drugs. Thus, specialty drugs are hefty contributors to self-funded employers’ health plan costs. (Source: optum.com)

One “solution” offered by third party vendors peddling AFPs is to remove coverage of specialty drugs from the employer’s formulary. This immediately renders those employees “uninsured” as far as coverage for their needed drugs goes. The AFP vendor then matches the newly uninsured employee with a patient assistance program offered by drug manufacturers and other charitable foundations. The patient’s co-pay is fully covered by the assistance program, the employer saves money, and the vendor takes a cut of the savings.

We think this so-called solution is underhanded and dangerous for patients.  It is also unethical and possibly illegal.

First, the charitable programs being mined by the AFP vendors are meant for the truly needy—those who are uninsured or underinsured. If these sources of funding are being drained by the AFPs, they won’t be available for patients who really need the assistance.

These programs are having a predictable effect:  drug manufacturers are starting to tighten the eligibility criteria for their charitable programs, limiting them to patients who are truly uninsured. That means the AFPs won’t be able to fulfill their promise to find alternative sources to pay for the medicine. The inevitable will happen:  patients will be forced to go back to their employers’ insurance, causing dangerous delays in treatment and eliminating any savings.

Critically, the AFP process interrupts and delays care for patients. One of the AFP vendors, aptly named SHARx, with a logo shaped like the predatory creature its name invokes, admits the process can take 2 to 6 weeks. While trying to enroll the previously insured patient in an assistance plan, they’ll “do as much as they can” to help a patient access their medicine, sometimes demanding they sign over power-of-attorney to their company. In practice, that means patients can be left in limbo with no coverage for a period of time.

How can an employer ethically expose their employees with serious health conditions to that risk? (Source: sharxplan.com)

There are also ERISA and IRS legal and compliance risks to self-insured employers, too, according to an analysis by Vivio, a Public Benefits Corporation (Source: viviohealth.com)

And by some accounts, the AFP vendors are taking a huge cut of any savings, as much as 25 percent, on top of the administrative costs employers must pay to implement the program. (Source: drugchannels.net)

Nonetheless, according to a 2022 survey, 10 percent of self-insured employers with at least 5,000 U.S. employees are using alternative funding vendors. Some 8 percent said they were planning to use them within two years and 19 percent are considering their use in three to five years. (Source: optum.com)

It is easy to initially discount AFP critics as defenders of unfettered drug pricing. However, even Optum, a subsidiary of leading health plan provider United Health Care, has sounded the alarm. They advise their clients “to look past the short-term sales pitch and consider longer-term financial implications, compliance risk and ethics of alternative funding programs.” (Source: optum.com)

We are raising the voice of consumers in support of efforts in Congress to rein in other dubious co-pay assistance schemes deployed by Pharmacy Benefit Managers such as co-pay maximizers and accumulators.  In this case, employers should take the lead in standing up for their employees’ health by refusing to open the door when third party AFP vendors come calling.

The National Consumers League applauds the reintroduction of bipartisan legislation to give millions of Medicare beneficiaries access to safe and effective obesity treatments

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July 21, 2023

Media contact: National Consumers League – Katie Brown, katie@nclnet.org, 202-823-8442

Washington, D.C. – The National Consumers League (NCL) welcomes the reintroduction  of the Treat and Reduce Obesity Act (TROA) as a needed step to end outdated Medicare rules that leave millions of seniors with diagnosed obesity – particularly members of Black and Latino communities – vulnerable to disability, disease and premature death due to lack of access to the full range of treatment options.

Introduced by Senators Tom Carper (D-DE) and Bill Cassidy (R-LA) and Representatives Brad Wenstrup (R-OH), Raul Ruiz (D-CA), Mariannette Miller-Meeks (R-IA) and Gwen Moore (D-WI), TROA will end this regulatory logjam by expanding coverage under Medicare Part D to new FDA-approved anti-obesity medications, which are currently excluded under a policy dating back to 2003. TROA will also end Medicare Part B restrictions on intensive behavioral therapy (IBT) that limit the delivery of IBT to primary care providers and restrict the physical locations where this care can occur. Through TROA, clinical psychologists, registered dietitians and nutrition professionals will be able to provide IBT if an individual with obesity is referred by a physician.

At a time when the obesity rate among adult Americans exceeds 40 percent and is even higher among communities of color – virtually half of African Americans (49.6 percent) and 44.8 percent of Hispanics are living with obesity – passage of TROA could be a critical step in changing the trajectory of a disease that for too long has been overlooked and undertreated. The National Consumers League applauds TROA’s reintroduction in the 118th Congress and pledges our support to gain passage of this important legislation on an expedited basis.

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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.

NCL Briefing: measuring the 340B program’s impact on charitable care and operating profits for covered entities

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Join the National Consumers League for a panel discussion with experts from Health Capital Group, the Community Oncology Alliance, and Johns Hopkins on this new white paper, which analyzes 340B’s impact on hospital profit margins and charitable care spending and attempts to quantify the amount of program benefits accruing to covered entities, contract pharmacies and patients.

Read more

Don’t forget to take advantage of Healthcare.gov Special Enrollment Period

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By Special Guest Kelley Schultz, Executive Director, Commercial Policy, America’s Health Insurance Plans and NCL Director of Health Policy Jeanette Contreras

More than 2 million Americans nationwide—1.5 million in healthcare.gov states, and an additional 600,000 individuals in states that run their own exchanges—have signed up for coverage during the 2021 Marketplace Special Enrollment Period that extends through August 15. Earlier this year, President Biden launched a new special enrollment period for the 36 states using healthcare.gov—and states that run their own marketplaces followed suit—to help people get health coverage and peace of mind.

Millions of Americans still have the opportunity to enroll in new health insurance plans through the healthcare.gov marketplace, whether they’re uninsured or currently enrolled and wish to switch plans.

The American Rescue Plan Act of 2021 temporarily increased the availability and generosity of the Affordable Care Act’s premium subsidies. As a result, 3.7 million Americans are eligible for expanded financial assistance to make premiums more affordable, including people who didn’t qualify for financial assistance before.

This Special Enrollment Period is a crucial opportunity as the country comes out of the COVID-19 pandemic and the financial hardship experienced by many—a quarter of U.S. adults say they or someone in their household has been laid off, with even more seeing reduced pay. The expanded opportunity for people to enroll in marketplace health plans with enhanced affordability is a major development that will provide much needed assistance to Americans who have faced economic stresses over the past year.

The deadline to enroll in coverage during the healthcare.gov Special Enrollment Period is August 15. States that run their own exchanges may have different deadlines, so consumers should check when their state’s special enrollment period ends. Additionally, current enrollees should return to healthcare.gov to check to access enhanced subsidies to lower their monthly premium and see if they can get additional savings by switching to a high-value plan with lower cost sharing.

The relief bill extended subsidies to 3.7 million people to help lower their monthly premiums and out-of-pocket costs, including people with incomes over 400% of the Federal Poverty Level ($51,040 for an individual or $104,800 for a family of four). Anyone with incomes below 150% of the federal poverty level ($19,140 for an individual or $39,300 for a family of four) is eligible for a high-value plan with a $0 premium and a very low deductible.

These increased subsidies make quality health insurance coverage more affordable for millions of Americans who are encouraged to visit healthcare.gov or their state exchange to see how they can sign up. Health coverage will start on the first day of the month after you select a plan, so it is important that enrollees consider this timeline while making their decisions.

Some SEP resources:

  • For help selecting a plan in any number of languages, you can access a navigator in your area here.
  • More information about the health insurance marketplace and the Special Enrollment Period can be found here.
  • Use a decision tree tool to see if you are eligible for the special enrollment period and get other fast facts here.

NCL commends HHS interim final rule regarding surprise billing protections

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Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242

Washington, DC—The National Consumers League (NCL) welcomes the Department of Health and Human Services (HHS) announcement of an interim final rule regarding surprise billing protections, to take effect on January 1, 2022. This rule is a major element of the implementation of the No Surprises Act, which was passed in December as part of the omnibus spending bill. It will eliminate surprise medical bills which have devastated American consumers for far too long.

Patients can be vulnerable to surprise medical bills when they unknowingly receive out-of-network care. This often happens in emergencies, where a patient does not have the luxury to choose an in-network provider, or when an out-of-network doctor such as an anesthesiologist provides ancillary care at an in-network facility. These charges can lead to sky-high bills for patients, often while they are dealing with unforeseen circumstances. Patients frequently forgo necessary care in fear of receiving surprise bills that could possibly subject them to medical debt. Surprise medical bills negatively impact patients, employers and taxpayers, leading to $40 billion in premium increases every year because certain providers can leverage their ability to leave the network for higher reimbursement rates.

Thankfully, the No Surprises Act and the new rule announced by HHS put a stop to most of these surprise billing practices, promising a major victory for consumers. The new rule:

  • Prohibits out-of-network cost-sharing for emergency care that is higher than in-network rates
  • Prohibits out-of-network charges for ancillary care provided at an in-network facility
  • Prohibits surprise billing for out-of-network air ambulance services
  • Requires advance notice and patient authorization for non-emergency care performed out-of-network

Under these new protections, consumers will be “held harmless,” and will gain relief from unscrupulous surprise charges. The requirements for transparency in billing and advance notice for out-of-network care will allow consumers to play a greater role in their own healthcare and ensure that they are safeguarded from unexpected costs while seeking care.

NCL applauds members of Congress and HHS Secretary Xavier Becerra for their bipartisan leadership in passing these protections into law and implementing the new rule. The No Surprises Act had been in legislative limbo for years, with no definitive agreement in place for its passage. The work of Senators Maggie Hassan (D-NH), Bill Cassidy (R-LA), and Patty Murray (D-WA) and former Senator Lamar Alexander (R-TN), alongside Representative Frank Pallone (D-NJ) and former Representative Greg Walden (R-OR) to at last secure the passage of the No Surprises Act is applauded. Their efforts will result in desperately needed protections for American consumers and fix one of the many flaws in America’s healthcare system.

As stated by Secretary Becerra, “Health insurance should offer patients peace of mind that they won’t be saddled with unexpected costs. The Biden-Harris Administration remains committed to ensuring transparency and affordable care, and with this rule, Americans will get the assurance of no surprises.” This rule will protect consumers and lead to a better functioning healthcare system. We hope that Secretary Becerra will continue to build on the positives of the new interim rule as HHS develops the final rule to implement the No Surprises Act and give healthcare consumers the protections that they deserve.

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About the National Consumers League

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 www.nclnet.org.

NCL supports the Protecting Seniors through Immunizations Act of 2021

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Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—The National Consumers League (NCL) is delighted to support the Protecting Seniors through Immunizations Act of 2021 (H.R. 1978/S. 912), introduced by Senators Mazie Hirono (D-HI), Tim Scott (R-SC), Sheldon Whitehouse (D-RI), and Shelley Moore Capito (R-WV), and Representatives Ann Kuster (D-NH) and Larry Bucshon (R-IN). The bill would expand access to immunizations for seniors by eliminating cost sharing for vaccines covered under Medicare Part D.

The legislation would eliminate out-of-pocket costs for all vaccines recommended by Centers for Disease Control and Prevention (CDC) and covered under Medicare Part D. This would apply to crucial immunizations such as the Shingles and tetanus, diphtheria, and pertussis, or Tdap, vaccines, along with future vaccinations. Currently all CDC recommended vaccines are covered with no out-of-pocket costs under private insurance, Medicaid, and Medicare Part B. Unfortunately, Medicare beneficiaries must often pay out-of-pocket costs of up to $160 for vaccines covered under Part D.

“As healthcare costs continue to skyrocket, policymakers should support legislation that eliminates financial barriers for Medicare beneficiaries to get their CDC recommended vaccines,” said NCL Director of Health Policy Jeanette Contreras. “Research shows that higher cost-sharing means fewer seniors will elect to receive their vaccines. By eliminating out-of-pocket costs for immunizations, older Americans will be better protected from vaccine preventable illnesses.”

More than 50,000 American adults die from vaccine-preventable diseases every year. Among other provisions, this bill would increase education about vaccines for Medicare beneficiaries and would authorize a study to find ways to boost adult vaccination rates. These steps are important at a time when misinformation regarding vaccine safety is spreading rampantly throughout society. Improving access to and utilization of vaccinations will enhance overall health outcomes and help to address existing racial and socioeconomic health disparities.

“Vaccines are amongst the most effective public health measures at our disposal. Routine immunizations can prevent diseases that have the potential to cause severe disease and wreak havoc on our most vulnerable communities,” said Contreras. “We urge Congress to pass the Protecting Seniors Through Immunization Act, to ensure greater equity in access to vaccines, in turn protecting the most vulnerable members in society from unnecessary and easily preventable illness and death.”

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About the National Consumers League

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 www.nclnet.org.

Jeanette Contreras portrait

PBMs profit while consumers foot the bill. Policymakers must act

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By NCL Director of Health Policy Jeanette Contreras

As consumers, when we go to the pharmacy for our medications, we expect a fair price. However, there’s growing evidence that pharmacy benefit managers — or PBMs — have been impeding the savings that should be going to consumers. Consumers deserve  to share in the cost savings, and we need policymakers to step in and help make that happen.

We previously wrote about our disappointment in how PBMs have evolved from once honest brokers to becoming profit driven and greedy, now taking savings away from consumers and patients.

One avenue PBMs use to pocket savings is through pharmaceutical rebates. PBMs negotiate with companies to lock in discounts for drugs in order to secure the drugs’ placement on a list (formulary). PBMs have notoriously leveraged formularies to give greatest access to the drugs that pay the PBMs the largest rebates, leaving less expensive drugs off-limits to consumers.

A recent Senate Finance Committee report found that rebates to PBMs have significantly increased since 2013 (some as high as 70 percent). But these discounts fail to lower the patients’ out-of-pocket costs for necessary treatments, such as insulin. For one product, the manufacturer offered the PBM a 56 percent rebate – which means more than half of the savings for insulin are going to a company that doesn’t even make the lifesaving medication.

Insulin is expensive. Forbes recently reported that newer versions cost patients between $175 and $300 a vial. The story points out diabetes patients need multiple vials, the cost of which add up quickly; the total annual value of rebates and discounts for PBMs is likely to be more than $5,000 per patient. As a result, consumers lose, paying more than many of them can afford for lifesaving drugs.

Another way PBMs profit is by avoiding competition, which would drive value and savings for consumers. Three main PBMs accounted for about 60 percent of all U.S. prescription claims in 2019. And when it comes to insulin, with so few industry players, it’s no surprise that consumers again find themselves on the losing end.

We’re pleased to see that some policymakers in the states are taking steps to address these issues. In New Jersey, the state is shaking things up by creating alternatives to how it contracts with PBMs — which is, in turn, increasing competition and benefitting consumers. New Jersey residents are saving  a bundle (to the tune of $2.5 billion over five years).

In New Hampshire, a recent study shows that the state can expect to save an estimated $17.8-$22.2 million annually thanks to legislation that will utilize a similar competitive PBM contract process.

While this is encouraging news, there is still more work to be done to bring to light the role of PBMs. Policymakers need to step in to ensure PBMs deliver savings to patients as they were originally intended to do. We’re encouraging state and federal action to review the role PBMs play in driving up costs and to address the many loopholes they use to increase profits.

Consumers — not PBMs — should come first at the pharmacy counter. Reach out to your elected officials. Share this story on social media to help raise awareness. And stay tuned as we continue the conversation.

Jeanette Contreras portrait

Expanded Medicaid coverage for postpartum care

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By NCL Director of Health Policy Jeanette Contreras

The COVID-19 pandemic has enlightened us to how the social determinants of health adversely impact maternal outcomes in low-income, medically underserved communities. Year after year, the United States continues to have the highest maternal mortality ratio among wealthy countries. In efforts to address this disparity, the American Rescue Plan Act includes a provision that allows states to expand Medicaid coverage to women for up to one year after childbirth.

The dismal maternal and infant mortality rates are directly correlated with the health disparities that disproportionately afflict black, indigenous, and women of color. A 2019 report from the Centers for Disease Control and Prevention (CDC) found that Black women were 3.3 times more likely than white women to die from pregnancy-related complications and Native American and Alaska Native women were 2.5 times more likely than white women to die within a year after childbirth.

Medicaid has traditionally been seen as a safety net for low-income pregnant women and children, providing health coverage that funds more than four in ten births in the U.S. each year. Under federal law, Medicaid must cover pregnant women with incomes up to 138 percent of the Federal Poverty Level (FPL) through 60 days postpartum. Each year, over 1.6 million women across the U.S. are effectively placed at risk for becoming uninsured when that 60-day coverage period ends.

Women who live in states that expanded Medicaid under the Affordable Care Act (ACA) are eligible to continue their health coverage through Medicaid. Additionally, the Families First Coronavirus Response Act, which passed last year, provides states with a 6.2 percent increase to the Federal Medical Assistance Percentage (FMAP) rate to cover new enrollees eligible under the ACA Medicaid expansion as long as the Public Health Emergency is in place or at least throughout 2021. However, the women living in the 14 states that have yet to expand Medicaid would find themselves uninsured.

Under the American Rescue Plan, for the next five years, states have the option to extend Medicaid and the Children’s Health Insurance Program (CHIP) eligibility to pregnant individuals for 12 months postpartum. Though each state’s Medicaid program is different, the inclusion of this provision incentivizes states to extend health care to mothers during the most vulnerable time in their lives. This increased access to health care will pave the way towards improving health disparities for our most at-risk women and infants beyond the pandemic.