Pharmacists push for reforms to pharmacy benefit managers in NC

Pharmacy benefit managers say attempts to restrict their business practices will lead to higher drug prices for patients. Rep. Heather Rhyne, who is proposing legislation to limit PBM profits, disagrees.

WRAL News

Reporter: Laura Leslie, WRAL capitol bureau chief

A bill advancing in the North Carolina legislature could affect how much consumers in the state pay for prescriptions. But what that effect would be depends on who you ask.

Pharmacists say House Bill 163 would limit the profits that go to middlemen known as pharmacy benefit managers. But PBMs say any attempt to restrict their business practices will lead to higher drug prices for patients./

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The measure passed the House Health Committee on Tuesday.

PBMs have a lot of power in the health care system. They negotiate drug prices with drug makers. They decide what to charge your insurer for a prescription, and how much to pay the pharmacist to fill it. There’s not much transparency in those decisions.

Critics say PBMs have every incentive to keep prices high, and no restrictions on their profits, since just three companies handle 80% of all prescriptions in the U.S.

Stephen Oradesky, an independent pharmacist in Raleigh, said PBMs often reimburse pharmacies for less than the drug actually costs the pharmacy to buy, so they lose money on that prescription. He said pharmacies can't afford not to do business with these powerful companies, so they accept their contracts. He said "spread pricing" by PBMs is driving up health insurance premiums for profit.

"They'll go to an insurer and say, 'Hey, this medication costs $40 for us to take care of.' So the insurer will pay the PBM $40," Oradesky told WRAL News. "And they'll give us 10 of those dollars and they'll pocket the other $30 for themselves. And they do this constantly."

PBMs can also require people to use a particular pharmacy chain — usually one that they’re affiliated with, which hurts their competition — and they often pay competing pharmacies less for prescriptions.

The measure would require PBMs to pay all pharmacies at least the national average cost of a drug, plus a dispensing fee of about $10. It would also require them to let patients choose their own pharmacy. And it would require PBMs to pass on drug rebates to consumers instead of keeping them as profit. The measure would also require PBMs to be more transparent about their operations... CONTINUE READING