America used to have the best healthcare system in the world. It may still be, but it’s getting harder to deal with.
Politicians promising to bring costs down typically hit on “solutions” that made things worse. One innovation they encouraged was the use of middlemen called pharmacy benefit managers — PBMs — which sounded like a good idea at the time but predictably created a mess.
The three largest PBMs control now more than 80 percent of the retail drug market. They are owned by three of the nation’s biggest insurers who use them to pad the corporate bottom line by taking advantage of the 15-year-long decline in the price of generics, instead of passing the savings on to consumers.
Military families, because of their dependence on the federal government, are particularly vulnerable to these kinds of marketplace manipulations. Many depend on TRICARE, a Defense Department program that pays for civilian health benefits for U.S. military personnel, retirees, and their dependents. Express Scripts, the CIGNA-owned PBM, is its sole provider.
When TRICARE-participating military families and retirees need prescriptions filled, they must use Express Scripts, which announced in September it was kicking more than 14,000 independent community pharmacists out of its network. By the end of October, these thousands of pharmacies will join Walmart and Sam’s Club, who have also been dropped from the list of approved providers. If that wasn’t bad enough, Kroger — America’s largest grocery chain — was recently forced to terminate its contract with TRICARE to protect its customers from rising prescription costs.
“There is no negotiating, these are take-it-or-leave-it contracts provided from Express Scripts Inc. to a pharmacy,” the National Community Pharmacists Association’s Karry La Violette said in an interview. “If you want to be in the network you take this horrible reimbursement rate or you don’t.”
It’s not pretty, and it doesn’t do much to raise the quality of care or keep costs down. You can’t stay in business if your biggest customers, by threatening to go somewhere else if you don’t comply, extract concessions requiring you to sell an item for less than it costs per unit to make or sell.
A letter sent to the Pentagon by nearly 100 members of the U.S. House of Representatives addressed these planned reductions that, because they’re scheduled for October, “may force beneficiaries to change pharmacies at a time when many receive annual vaccinations.”
Cigna and Express Scripts are putting their interests ahead of the interests of the people PBMs were created to serve by squeezing out every penny they can out of military families, pharmacies and the federal government. TRICARE beneficiaries are stuck, watching as their benefits are mismanaged, and their options decrease.
Congress and federal regulatory bodies are now involved. That’s no guarantee things will get better, but the pressure is on. The Federal Trade Commission recently launched an investigation into PBMs, and a bipartisan coalition of senators wants the agency to complete its inquiry quickly and forward its findings to them.
Using intermediaries positioned between manufacturers and retailers to negotiate prices should have worked to keep costs down. It would have if the PBMs had functioned as honest brokers. Instead, big insurers like Cigna and its Express Scripts PBM benefit at the expense of consumers forced to pay inflated prices while seeing their choices reduced.
The whole business makes a mockery of the marketplace. If the companies do not clean up their act on their own, Congress and regulators like the FTC’s Lina Kahn will force them to. Politicians shouldn’t get the chance to make it harder and more complicated for people to get the healthcare they need and want.
These companies know what they are doing. They need to stop, and to stop undermining free-market principles in the process.
Copyright 2022 Peter Roff distributed by Cagle Cartoons newspaper syndicate. Roff is a former columnist for U.S. News and World Report, and senior political writer for United Press International.