Pharmacy Benefit Managers

Imagine opening your mail one morning and finding a letter from a pharmaceutical company questioning a prescription you wrote for a competitor’s drug and suggesting that your patient might benefit more from their drug. Or how about a letter explaining that because you prescribed an anti-depressant for a patient, the pharmacy benefit manager for your patient’s employer’s health maintenance organization had enrolled the patient in a depression support group - without even consulting you.

These are not made up scenarios. In fact, they are happening to your colleagues here in Texas regularly, and it’s all being done under the banner of controlling health care costs.

Prescription drug benefits are the fastest rising segment of health care expenditures in America. To rein in these expenses, employers who provide health benefits to their workers and the HMOs, which provide those benefits, increasingly are turning to pharmacy benefit managers (PBMs). PBMs are companies who track all prescriptions written by physicians in a health plan they’ve contracted with. They administer prescription drug claims, establish formularies, track physician prescribing patterns and provide education to improve their efficiency and cost effectiveness, and provide disease management programs, such as the depression support program mentioned earlier.

Unfortunately, Texas physicians report a number of PBM-related problems that they believe are compromising patient care. Top among these is the increasing intrusion of PBMs into patient privacy. The PBMs and the HMOs they work for collect an enormous amount of patient-specific information under the guise of properly processing benefit claims. Unfortunately, that information often is finding its way back to patients’ employers, who contend they have a right to the information since they ultimately pay the bills. And, since some of the nation’s largest PBMs are owned by pharmaceutical manufacturers, the information is being passed on to drug makers who, in turn, are beginning to use it in the marketing efforts.

Texas physicians have raised the alarm about these practices. They fear this breech of patient confidentiality will have a negative impact on patient care, particularly among those suffering from mental illness, sexually transmitted diseases or other sensitive medical conditions. The concern is that some patients won’t even seek desperately needed treatment for fear their employer will find out about it.

But the PBM problems are not limited to privacy. Other concerns have been raised about unauthorized drug substitution or "slamming," arbitrary formulary restrictions that might favor drugs manufactured by the PBM’s parent company, and financial incentives to encourage physicians to prescribe certain drugs.

While these are serious concerns, PBMs are largely unregulated in this state. Texas Medical Association and some lawmakers believe that needs to change and these problems need to be addressed now. Sen. Jane Nelson (R-Flower Mound) and Rep. John Smithee (R-Amarillo) are considering legislation to ensure that sensitive information is not turned over to employers or drug manufacturers or sold to other third parties.

And, TMA is working with the PBMs to address these issues on a more informal basis. TMA has asked Texas’ two largest PBMs to cooperate in developing and codifying preferred industry standards that protect patients’ rights and quality care.

We acknowledge that pharmaceutical costs are rising rapidly and need to be controlled to ensure all our patients can afford health coverage and pharmacy benefits. But as physicians, we must ensure that the health care marketplace is not dominated by companies who lack our level of commitment to the quality of our patients’ care or who would sacrifice patient needs in favor of investor profits. We hope the pharmaceutical industry and their PBMs will join us in putting patients first.


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