PBMs/Pharmacy Benefit Managers

Report Details Providers’ Mounting Concerns With White Bagging

White bagging continues to be a sore subject for providers, according to a June 21 Avalere Health report. As in past reports, providers surveyed by Avalere are concerned that white bagging can harm patients and lead to wasted medication — which can add up, since payers only use white bagging strategies for expensive specialty medications. The report also raised concerns that payer ownership of specialty pharmacies raises conflicts of interest and could accelerate provider consolidation.

White bagging is a payer practice that significantly changes the customary dispensing and billing arrangements around provider-administered drugs. Until recently, providers used the “buy-and-bill” framework with regard to such drugs. In buy-and-bill transactions, which still account for the vast majority of specialty pharmacy care, providers purchase a specialty drug, stock it in their facility and charge a payer for it after administering the drug to a patient.

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© 2024 MMIT

Most Payers Have Not Followed Blue Shield of California’s PBM Unbundling Model

Blue Shield of California caught the attention of the industry last August when it announced a switch to a pharmacy benefits model using five vendors. While some insurers and plan sponsors have considered a similar move following Blue Shield’s revelation, benefits consultants tell AIS Health, a division of MMIT, that most payers continue to have a traditional arrangement where one PBM handles all pharmacy-related activities. They add that Blue Shield’s so-called unbundled approach could be difficult to manage and may not achieve significant cost savings.

A survey released last month from the Pharmaceutical Strategies Group (PSG) found that 72% of health plan respondents had heard about Blue Shield of California’s change. Morgan Lee, Ph.D., PSG’s senior director of research and strategy and one of the report’s authors, noted during a June 18 webinar that the survey was conducted in February and March. As such, “we’ll probably continue to see [awareness of unbundling] increase over time,” Lee said.

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© 2024 MMIT

Shot and Chaser: FTC Issues PBM Report, Reportedly Plans Lawsuit

When the Federal Trade Commission on July 9 released an interim report based on its yearslong investigation of PBMs, criticism of the document abounded, with even an FTC Commissioner saying it wasn't nearly comprehensive enough to publish. However, one day later the FTC appeared to prove its critics wrong, with the Wall Street Journal reporting that it plans to sue the three largest PBMs over their business practices related to the rebates they negotiate with drug manufacturers for products like insulin.

The FTC has not yet confirmed the WSJ report, which cited a person familiar with the matter. But it would not be the first time the federal government attempted to reform how PBMs treat drug rebates. The Trump administration proposed a rule in 2019 that would have effectively forced PBMs to pass negotiated rebates on to consumers at the point of sale in Medicare Part D and managed Medicaid, but it later tabled the regulation.

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© 2024 MMIT

FTC’s First Shot at PBMs Leaves Many Industry Critics Wanting More

When the Federal Trade Commission (FTC) on July 9 released an interim report based on its yearslong investigation of PBMs, criticism of the document was in no short supply.

The trade group representing major PBMs, the Pharmaceutical Care Management Association (PCMA), said the report “falls far short of being a definitive, fact-based assessment of PBMs or the prescription drug market.” And FTC Commissioner Melissa Holyoak, who voted against issuing the report, said during a House Energy & Commerce Committee hearing on July 9 that the report is not nearly comprehensive enough and “lacks economic and empirical evidence.”

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© 2024 MMIT

Here’s Why States, Pharmacists Want SCOTUS to Weigh Another PBM Case

Although the Supreme Court has already weighed in on one case regarding states’ ability to regulate PBMs, the top law enforcement officials in more than 30 states are asking the high court to review another case that they claim will remove lingering uncertainty about the limits of states’ authority.

In PCMA v. Mulready, the current case, the Pharmaceutical Care Management Association is challenging an Oklahoma law — the Patient’s Right to Pharmacy Choice Act — which sets geography-based access standards for pharmacy networks. Among other provisions, it also bans PBMs from using discounts or cost-sharing differences to push plan members to certain in-network pharmacies, particularly those owned by that same PBM’s parent company.

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© 2024 MMIT

Drug Benefit Design Survey Touches on GLP-1s, ‘Unbundling,’ Gene Therapies, Tiering Strategies

When designing their drug benefits packages, deciding how to approach GLP-1 medications was a top concern for plan sponsors, according to Pharmaceutical Strategies Group’s 2024 “Trends in Drug Benefit Design Report,” sponsored by Prescryptive Health. The report is based on surveys of 223 individuals representing employers, health plans and union/Taft-Hartley plans.

The report highlighted the complexities presented by the demand and high costs of GLP-1 drugs. In 2024, over 90% of all employers and health plans covered GLP-1s for Type 2 diabetes, while just over 30% covered these drugs for obesity. Of those who excluded the medications for obesity from coverage, 38% considered them too expensive to cover.

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© 2024 MMIT

Drug Benefit Design Survey Touches on GLP-1s, ‘Unbundling,’ Gene Therapies, Tiering Strategies

When designing their drug benefits packages, deciding how to approach GLP-1 medications was a top concern for plan sponsors, according to Pharmaceutical Strategies Group’s 2024 “Trends in Drug Benefit Design Report,” sponsored by Prescryptive Health. The report is based on surveys of 223 individuals representing employers, health plans and union/Taft-Hartley plans.

The report highlighted the complexities presented by the demand and high costs of GLP-1 drugs. In 2024, over 90% of all employers and health plans covered GLP-1s for Type 2 diabetes, while just over 30% covered these drugs for obesity. Of those who excluded the medications for obesity from coverage, 38% considered them too expensive to cover.

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© 2024 MMIT

News Briefs: Arkansas Sues PBMs, Claims They Worsened Opioid Epidemic

Arkansas Attorney General Tim Griffin, a Republican, sued UnitedHealth Group’s Optum Rx and The Cigna Group’s Express Scripts over their alleged roles in the opioid epidemic. In the suit, Griffin accuses the PBMs of profiting from inappropriate opioid prescribing. According to a statement from Griffin’s office, between 2006 and 2014, 1.5 billion “units of addictive opioids” were dispensed in Arkansas, amounting to a rate of 114.6 opioid fills per every 100 Arkansans. The suit alleges that PBMs “increas[ed] opioid utilization by placing opioids on lower tiers of their formularies” and operated online pharmacies that dispensed opioids “while failing to follow state and federal laws on controlled substances.”

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© 2024 MMIT

Here’s Why States, Pharmacists Want SCOTUS to Weigh Another PBM Case

Although the Supreme Court has already weighed in on one case regarding states’ ability to regulate PBMs, the top law enforcement officials in more than 30 states are asking the high court to review another case that they claim will remove lingering uncertainty about the limits of states’ authority.

In PCMA v. Mulready, the current case, the Pharmaceutical Care Management Association is challenging an Oklahoma law — the Patient’s Right to Pharmacy Choice Act — which sets geography-based access standards for pharmacy networks. Among other provisions, it also bans PBMs from using discounts or cost-sharing differences to push plan members to certain in-network pharmacies, particularly those owned by that same PBM’s parent company.

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© 2024 MMIT

News Briefs: State Officials Urge SCOTUS Review of PBM Regulation Case

A bipartisan group of state attorneys general recently filed an amicus brief with the Supreme Court, asking it to review an appeals court decision that limited states’ ability to regulate PBMs. In August 2023, the U.S. Court of Appeals for the Tenth Circuit ruled to block an Oklahoma law that contained provisions such as setting uniform standards for pharmacy networks and banning PBMs from using discounts to drive customers to pharmacies owned by their parent companies. That ruling was the result of a challenge to the Oklahoma law brought by the Pharmaceutical Care Management Association (PCMA). In PCMA v. Mulready, the PBM trade group argued that Oklahoma’s law is preempted by the Employee Retirement Income Security Act of 1974 (ERISA) and the statues governing Medicare Part D. But in their brief urging the Supreme Court to review the case, Minnesota Attorney General Keith Ellison (D) and his colleagues argue that the Tenth Circuit’s broad approach to federal preemption would “severely and unduly impede states’ abilities to protect their residents and regulate businesses.” In a similar case regarding an Arkansas law regulating PBMs, Rutledge v. PCMA, the Supreme Court rejected the PBM trade group’s ERISA-preemption argument.

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© 2024 MMIT