Wasn’t it exciting as a kid when one of your favorite TV shows would have a special multi-episode arc full of guest stars? Well, the same thing has been happening in the U.S. Senate this year, as the Finance Committee takes on drug pricing.
They’ve held several hearings in which external experts submit testimony and answer senators’ questions. Part I included patients and advocates. Part II comprised seven pharma CEOs. (Read our summary here.) And this month, Part III saw five CEOs of pharmacy benefit managers (PBMs) take the stand.
Given that both legislation and the pharma industry tend to move slowly, it’s unsurprising that we haven’t yet seen a great deal of change arise from these meetings. This last session, however, was particularly interesting to me in my role as Intouch’s VP of Market Access.
PBMs were originally created to help patients, payers, and drug companies by taking over the processing of prescription claims. But they’ve found themselves in healthcare’s crosshairs for some time, blamed by both insurers and manufacturers for price increases borne by patients. PBMs served a purpose in their time, but I think it’s high time we develop ways to manage prescription benefits more rationally and efficiently.
Change is definitely already underway: PBMs are evolving. Some are merging with payers. In other cases, other payers are creating their own PBMs. But this public spotlight is ratcheting up that pressure on them, and the hearings will increase the pace of change. They function not only as a legislative procedure, but also as a public-relations push, and, as such, will probably result in changes to laws as well as to the market.
I expect the former to take longer than the latter. The free market does usually police itself more rapidly than the government. The increased scrutiny should motivate innovation and better behavior – something we’re already seeing in efforts like Cigna/Express Scripts’ $25 insulin offering. But as with many other improved business practices, I expect these changes to be largely tech-driven. We’ll see PBMs are suggesting new ways to individualize how they communicate with, and help, patients. We’ll probably also see other players suggesting new paths that circumvent PBMs.
We’ll continue monitoring and providing updates on the Senate’s hearings on drug pricing.
I do see political change coming – whether it’s changes to Medicare’s prescription-drug coverage (Part D), which the PBMs recommended in the hearings, or in other ways – but probably not until 2020.
Regardless, change is coming for PBMs. The wisest ones will find new ways to become better compatriots in healthcare, providing better value for payers, manufacturers, and, most importantly, patients. They have an opportunity to demonstrate authentic change with public-facing tools and programs. In addition to all of our work with prescription brands, we’re also working with healthcare companies that are learning how to do this. It’s heartening to see more organizations realize the ways they can do better, and to be able to help them do it.