The Expensive Truth Behind Taxpayer-Funded Mail Order Pharmaceuticals

In In The News by Barbara Jacoby

LLH network pressWashington, D.C. – Pharmacy Choice and Access Now (PCAN), a coalition of consumers, local businesses and pharmacists committed to preserving quality and affordable health care, today applauded the Taxpayers Protection Alliance (TPA) for exposing the ‘expensive truth’ behind mail-order pharmacies. At an event co-hosted by the  National Community Pharmacists Association (NCPA), TPA released the paper, which highlights the waste, fraud and abuse that exist in the mail-order system run by pharmacy benefit managers (PBMs) and the resulting costs for patients, taxpayers, health insurance companies and the government.

“Ironically, PBMs that were created to help control the cost of drug coverage are some of the worst culprits when it comes to abusing the system for their own financial gain, ” said Bill Mincy, Vice President of Business Development at PPSC and PCAN Chair.  “We applaud the Taxpayers Protection Alliance for shedding some light on the problems that exist within the PBM-run mail-order system and the negative impact on patients. This is an important issue that requires serious attention.”

PBMs are the largely unregulated drug middlemen that manage prescription drug benefit programs for employers, unions, health plans and other payers.  They were created to help control the cost of drug coverage, but as they have increased in terms of size and power their business model has gone from one aimed at helping patients realize cost savings, to one aimed at increasing profits.

Today, PBMs control the drug benefits of more than 200 million patients nationwide (including Medicare Part D beneficiaries, federal employees, servicemen and veterans that are TRICARE beneficiaries, and many more).  They are complex entities with multiple, extremely profitable revenue streams – including their own mail-order pharmacies.

“Most large PBMs also own their own mail order pharmacy. PBMs at times have even financially penalized patients that choose to use their community pharmacy rather than the PBM-owned mail order pharmacy,” the paper states. “The relationship between a PBM and the mail-order prescription companies is a simple one, but the damages this inflicts on taxpayers is complex.”

Each of the giant PBMs owns a mail-order drug company and attempts to drive its customers away from community pharmacy and into the mail-order firm it owns.  PBMs argue that this saves consumers and plan sponsors money when, in fact, their motivation is higher profits.

As the TPA paper outlines, the only entity that benefits from this approach is the PBM itself.  Meanwhile, patient safety can be put at risk and patients, taxpayers, health insurance companies and the government are left covering any hidden costs.