The Diabetes Patient Advocacy Coalition is grateful for the opportunity to comment on the business practices of Pharmacy Benefit Managers (PBMs) and their impact on the over 37 million Americans with diabetes. We are encouraged by the Federal Trade Commission’s (FTC) effort to gather input as our community suffers amidst a financially burdensome health care system, driven in part by PBM practices.
Some years back, PBMs inserted themselves into the patient-provider relationship, dictating which medications should be prescribed. Ever since, people with diabetes expect annual letters explaining that their plan now prefers a different product – even essential medicines like insulin and brand drugs with no generic alternative. PBM drug utilization management techniques disrupt stable treatment regimens, placing otherwise healthy patients at risk of life-threatening complications - all so they and their insurance company parents can line their pockets. Continuity of care is critical to patients living with chronic diseases like diabetes, yet PBMs have made it so that their bottom line is the sole determinant of a patient’s course of care .
The PBMs’ drive for larger profits have also led patients to experience higher and higher list prices for life-saving medications. Through the perverse rebate system, a vial of analog insulin is sold to the patient at a list price of $335 while PBMs and insurance plans pay less than $80 at net cost. People could save money by buying the same vial outside their insurance plan for as low as $40, but it won’t count toward their deductible or out-of-pocket maximum. Rather than share in the discounts negotiated on their behalf, patients must pay an unconscionable $300 toll for limited access to an opaque system created by insurance companies and PBMs for their own financial benefit.
Making matters worse, PBMs are not covering cheaper insulins as they come to market in the form of biosimilars. Instead, they continue to prefer higher priced branded biologic medications which provides them greater amounts of rebates and enhanced profitability - at no point is patient cost-saving included in the calculations.
The financial manipulation of people with diabetes and other serious chronic health conditions has largely gone unchecked as the marketplace has vertically integrated. Today, the three largest PBMs control nearly 80% of the market, determining which medicines are prescribed, which pharmacies may fill prescriptions, and the patient’s out-of-pocket share of the cost. This anti-competitive market places a disproportionate hardship on people managing complex and costly conditions every day.
PBMs and insurers will claim they are using these rebates to reduce premiums for all plan members, making the sick subsidize the healthy. An actuarial study shows that the cost of correcting this unfair practice will result in overall premiums increasing by just 4/10 of one percent for most plans, not including plan savings from having healthier members.
We as the Diabetes Patient Advocacy Coalition, and the undersigned advocates herein, urge the FTC to undertake a close examination of PBM practices that have continued to negatively impact people with diabetes and other serious chronic health conditions.
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