PBMI: Managing Specialty Drug Costs, Working With ICER And Promoting Transparency

Jabs at the biopharmaceutical industry’s “middleman” escalated to a full-on assault last spring, when chief executives from the nation’s largest pharmacy benefit managers (PBMs) were brought before Congress for questioning on their role in the rising costs of prescription drugs. The hearing followed the February 2019 release of a Trump administration proposed rule that would have banned the use of negotiated drug price rebates in federal health plans, such as Medicare Part D. Instead, any rebates negotiated for specific drugs would need to be passed along directly to patients taking those drugs, offsetting their out of pocket costs at the pharmacy.

Then last July – following actuarial studies showing that the rule, if implemented, would likely raise Medicare monthly premiums and lead to an increase in government spending – the Trump administration unceremoniously shelved it. The rule would have jolted the traditional PBM business model by removing a key lever for managing costs: exchanging formulary position for deep proprietary drug rebates and using those rebates to control monthly premium increases. Drug price finger-pointing between the PBM industry (stop raising your prices!) and the biopharmaceutical industry (stop pocketing your rebates