Plan sponsors and PBMs that manage prescription drug benefits under Medicare Part D are shifting
costs and risks to America’s seniors and taxpayers by artificially inflating
prescription drug costs at the pharmacy counter, according to a groundbreaking new
study released today.
The study, “Deserving
of Better: How American Seniors Are Paying for Misaligned Incentives Within
Medicare Part D,” reveals how practices and tactics employed by
prescription drug plan sponsors and PBMs in Part D result in soaring drug costs
at the counter for America’s seniors – to the detriment of patients, taxpayers,
and pharmacies, and for the benefit of the Part D plans and PBMs themselves.
The study was performed by analytics firm 3 Axis Advisors and was sponsored by American Pharmacy Cooperative, Inc. (APCI) and
the American Pharmacists Association (APhA).
“It is unconscionable that our nation’s senior citizens, who
depend on Medicare Part D for their life-saving medications, are spending more
and more of their money each year while the stock prices and profits of these
prescription drug plans and PBMs are skyrocketing,” said Tim Hamrick, APCI CEO.
“Many have long asked why the United States pays more than any other country in
the world for prescription medications, and this study provides a long, hard
look at some of the contributing factors as to why that is.”
While the study identifies how misaligned incentives and poorly-defined “Direct and Indirect Renumeration” (DIR) fees
are increasing costs for seniors, it also reveals a path forward for
increasing transparency in the system while saving seniors and the government more than $18 billion annually. The
study examines a policy shift for Medicare to move away from its current system
of utilizing over-inflated list prices for prescription pricing to a more accurate
and realistic model, such as the model used by Medicaid programs in most
The findings in the study are particularly salient as the Centers
for Medicare and Medicaid Services (CMS) is currently considering a proposed
rule to address retroactive DIR fees, which have increased 107,400 percent between 2010 and 2020.
“When we call out PBMs for their behind-the-curtain
dealings, we’re not just spewing rhetoric. We’ve got the evidence to prove our
point. This study is further proof that we need to fix the broken pharmacy
payment model. APhA has realistic solutions to share,” stated Scott
J. Knoer, MS, PharmD, FASHP, APhA executive vice
president and CEO.
“This study is groundbreaking. We knew DIR fees were wreaking havoc on drug
prices, beneficiaries, and pharmacies but this study reveals the lengths some PBMs and plans will go to pad their profits, including deliberately
raising drug prices and clawing back money not just from pharmacies but from
the patients themselves. It is time for
CMS and Congress to take a sledgehammer to the status quo to protect America’s
seniors, taxpayers, and community pharmacies. This study provides a road map to
doing just that,” said Greg Reybold, APCI’s Director of Public Policy and
APhA is the only organization
advancing the entire pharmacy profession. Our expert staff and strong volunteer
leadership, including many experienced pharmacists, allow us to deliver vital
leadership to help pharmacists, pharmaceutical scientists, student pharmacists,
and pharmacy technicians find success and satisfaction in their work and
advocate for changes that benefit them, their patients, and their communities.
For more information, please visit www.pharmacist.com.
APCI is a member-owned cooperative of 1,700 member
pharmacies in 30 states. Established in 1984 and headquartered in Bessemer,
Ala., APCI is proud to lead the fight for prescription drug pricing
transparency and reform.