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Biden’s health chief rips pharmacy benefit managers during Flint visit

Biden’s health chief rips pharmacy benefit managers during Flint visit

Flint — U.S. Health and Human Services Secretary Xavier Becerra called for funding and policies that support independent pharmacies by eliminating pharmacy benefit managers (PBMs) alongside representatives of the Michigan Pharmacists Association and the Michigan Independent Pharmacy Association during a visit to Flint on Wednesday.

PBMs are third-party administrators of prescription drug programs for health insurance plans that have become vertically integrated with the country’s main health insurers and retail pharmacies, according to the Federal Trade Commission. They have significant control over the pharmaceutical supply chain and have been the targets of a recent insulin price-fixing lawsuit filed by four Michigan counties earlier this year and blamed for offering low reimbursement rates and recent pharmacy closures across the state.

“We want to get rid of the middlemen that are making it really difficult for some of the independent pharmacies right now. These PBMs, pharmacy benefit managers, that are out there, that are essentially controlling the market — I say that somewhat figuratively, controlling the market and how their drugs are dispensed and are priced,” Becerra said. “We think that those middlemen who are sucking money out of the system that never actually goes to provide health care or provide medicine, really is a disservice to everybody, including the taxpayer.”

The three leading PBMs, CVS Caremark, Express Scripts, and OptumRx, control nearly 80% of prescription drug claims in the U.S.

“The only winners in a world without PBMs are the big drug companies,” CSV Caremark spokesman Phil Blando said in response to Becerra’s comments. “Employers and consumers would all see higher prescription drug costs, as Big Pharma’s egregious price increases would go unchecked.”

Express Scripts and OptumRx did not immediately respond to requests for comment Wednesday afternoon.

An interim report released Tuesday by the Federal Trade Commission highlights how PBMs profit at the expense of independent pharmacists and patients. The six largest PBMs manage almost 95% of all prescriptions filled in the U.S. and can hike up drug prices for customers, impose “unfair, arbitrary, and harmful contractual terms” on independent pharmacies, and may limit access to potentially lower-cost generic drugs, the report says.

The report is part of an ongoing inquiry that began in 2022.

Becerra criticized PBMs during a visit to Genesee Health System on Wednesday, where he was promoting President Joe Biden’s caps on monthly insulin charges for seniors on Medicare and locally-owned pharmacies.

His visit follows a string of widespread chain pharmacy closures across Michigan and other states in recent years. Walgreens has closed 350 stores across the country since 2019, while its rival CVS Health has shuttered 600 pharmacies since 2022. Rite Aid filed for bankruptcy in October and announced last month that it would close 12 Michigan stores.

Many independent and community pharmacies are currently under financial attack and at risk of closure, Flint Family Pharmacy Manager Bryan Homberg said at Wednesday’s press event with Becerra.

More: Pharmacy closures ripple across Michigan. Here are the reasons and the impact

The Michigan Pharmacists Association says that pharmacies are struggling with low reimbursement rates from PBMs, a struggle that John Gross, owner of the Flint Family Pharmacy, is also intimately familiar with. Gross said he would love to negotiate drug pricing with PBMs.

“There’s a reason why the Rite Aids are having problems, among other things, and there’s a reason why the Walgreens and CVS’ have closed, and there’s a reason why all of these independents have closed or are closing or will need to close,” Gross said. “It’s a main result of we cannot negotiate with these reimbursements that we’re getting, and it’s unsustainable.”

Becerra said he is pursuing continued investment into independent pharmacies as well as policy changes that will keep them open.

“Someone who’s living in this community is going to try to do a better job of providing Flint residents with medication they need some than some corporate headquarter,” Becerra said.

More: CVS Health grows more cautious about 2024 as it deals with rising Medicare Advantage costs

No-cost vaccines for seniors

Becerra also touted progress made under the Inflation Reduction Act, which was passed two years ago and has made preventive adult vaccines for diseases like shingles, influenza, COVID-19, and whooping cough free for seniors and people with disabilities on Medicare since Jan. 1, 2023.

The out-of-pocket costs for these vaccines in Michigan were nearly $8 million in 2021, according to the U.S. Department of Health and Human Services. Homberg said it has already helped many clients.

“I remember many patients that in prior years could not afford updated shingles vaccines, and other prescriptions as previously discussed,” Homberg said. I know that these patients have now been vaccinated and protected as I’ve personally taken care of them.”

The biggest challenge in implementing the new prescription drug law has been getting the word out, Becerra said.

“People aren’t fully aware of the new law and its impact,” Becerra said. “Unless they happen to hear the word come down that that vaccine now is available without charge, they’re just not going to bother.”

Lowering prescription drug costs

Rising prescription drug prices have forced Americans to ration essential medications, Becerra said.

“People are cutting your pills in half so they can extend how long they’ll go with those pills before they have to buy the next batch,” Becerra said. “People are skipping days when they should be taking their pills because they need to make those pills last longer. Peace of mind comes when you don’t have to do those kinds of things.”

The Inflation Reduction Act capped the cost of insulin for Medicare recipients at $35 a month which is an important first step, but there is still work to be done, Roath said. Biden has previously advocated for the benefit to be expanded to everyone, not just those on Medicare.

Starting next year the Inflation Reduction Act will also cap the total out-of-pocket costs that Medicare recipients have to spend on prescription drugs every year at $2,000, Becerra said. The act also gave Medicare the authority to negotiate prices on the 10 most expensive drugs in the country with pharmaceutical companies. The results of these negotiations are expected in the next two months, Becerra said.

“Ultimately, this means better access to essential health care services, including medications for all citizens, but especially for our most vulnerable popular patient populations,” said Eric Roath, director of government affairs at the Michigan Pharmacists Association. “Lower costs and sustainable pharmacy access is a key component to ensuring equitable health outcomes for all Michiganders.”

Last month Blue Cross Blue Shield of Michigan announced they would be dropping coverage of popular weight loss drugs including Wegovy, Zepbound and Saxenda, citing large increases in the drug’s prices. Some of the drugs, like Wegovy, remain covered by the state’s Medicaid health insurance for low-income residents.

Becerra said he couldn’t comment on private insurers’ decisions but said that generally, all Americans should have access to affordable life-improving and life-saving medications.

“We should be doing everything we can to make sure that Americans have access to those types of life, improving life-saving medications,” Becerra said. “The whole question about these weight loss medications is how you use them, when you use them, and how much you’re going to cost, who will pay.”

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