Secret Negotiations by PBMs Prioritize Profits Over Patient Outcomes

A peer reviewed paper published in Health Science Journal from the Global Healthy Living Foundation evaluating the 2022 national formulary of the second-largest PBM in the US found that nearly half (46%) of their 563 exclusions had questionable clinical or financial benefits to patients, meaning that prescribers are forced to select treatments that may have adverse financial or medical outcomes for their patients. The study also found that in some cases, the exclusions violate the core principle of a "formulary," where lower-priced generics, authorized generics, or biosimilar should be preferred over equivalent brand name medicines.

“The original intent of formularies was to incentivize the use of the least costly medication that was also safe and effective for a particular medical condition. However, the consolidations of PBMs and their subsequent purchase by large health insurance companies allows three major companies to collectively process more than 75 percent of prescriptions and what we now have is warped system driven by profits that stem from rebates coordinated in secret negotiations between PBMs, payers, and drug manufacturers,” said Dr. Robert Popovian, Pharm.D., MS, Chief Science Policy Officer at the Global Healthy Living Foundation, Senior Health Policy Fellow at the Progressive Policy Institute and Visiting Health Policy Fellow at the Pioneer Institute and lead author of the study. “Excluding a drug means that the insurer will not cover any portion of the cost and the patient must cover the full cost, which presents an insurmountable financial barrier for many patients.”

Exclusions Based on Contracts Not Patient Outcomes

The study evaluated the Express Scripts (ESI) 2022 National Preferred formulary as ESI provides a publicly available national preferred formulary exclusion list annually. For each of the 563 exclusions, the research team categorized the therapeutic into one of three categories. An equivalent substitution (68.6%) meant a brand, generic or biosimilar medicine is excluded in favor of a preferred brand, generic or biosimilar medication containing the same active ingredient. A therapeutic substitution (29.8%) excluded a brand, biosimilar, or generic medicine in favor of another brand or generic drug that does not contain the same active ingredient, and a complete exclusion (1.6%) meant that a therapeutic was excluded with no recommended alternative. The study found that all of the therapeutic substitutions were of questionable medical benefit because the excluded formulation is not the same as the alternatives covered by the PBM.

“Patients do not see any financial benefit when PBMs and insurers make drug purchasing decisions” said Louis Tharp, executive director, Global Healthy Living Foundation. “Half of the exclusions in formularies are justifiable from a cost-benefit perspective. The other half aren’t. As patient leaders we need to insist on more transparency from pharmacy benefit management companies about why they are anti-patient half the time. My prediction is because it makes them more money.”

Click this link to review “Analysis of Drug Formulary Exclusions from the Patient's Perspective.”

About Global Healthy Living Foundation

The Global Healthy Living Foundation is a 501(c)(3) nonprofit organization whose mission is to improve the quality of life for people with chronic illnesses (such as arthritis, osteoporosis, migraine, psoriasis, inflammatory bowel disease, and cardiovascular disease) by advocating for improved access to health care at the community, state, and federal levels, and amplifying education and awareness efforts within its social media framework. GHLF is also a staunch advocate for vaccines. The Global Healthy Living Foundation is the parent organization of CreakyJoints®, the international digital community for millions of arthritis patients and caregivers worldwide who seek education, support, activism, and patient-centered research in English and Spanish through our ArthritisPower® (ArthritisPower.org) Research Registry. In response to the COVID-19 pandemic, GHLF started a Patient Support Program, informed by a patient council made up of people living with a wide range of chronic illnesses, that now serves more than 46,000 subscribers. Via CreakyJoints, GHLF also hosts PainSpot (PainSpot.org), a digital risk-assessment tool for musculoskeletal conditions and injuries, eRheum (eRheum.org), for telehealth and virtual-care support, and a constantly refreshed library of podcasts via the GHLF Podcast Network. Visit ghlf.org for more information.

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