The legend of the Trojan horse is a great story of how an ingenious bit of trickery led to the end of the 10 year war between the Greeks and Trojans sometime around 1200 B.C. The Greeks built a giant wooden horse and left it at the gates of Troy as a gift. Unbeknownst to the Trojans, the horse was filled with Greek soldiers. As Greek troops pretended to sail away, the Trojans pulled the giant horse into the city and celebrated their apparent victory. Under the cover of darkness as the Trojans slept, the Greek troops came out of the horse and opened the gates to let the rest of their soldiers into the city. Within hours, the Greeks destroyed the city of Troy.
Today, some states have created a Trojan Horse in their efforts to control prescription drug costs. Recently states have passed or proposed legislation regulating Pharmacy Benefit Mangers (PBMs) based on the debatable premise that PBMs, not drug manufacturers, are a major driver of rising drug costs. PBMs are certainly not perfect and reforms are needed. But some of regulations, like West Virginia’s mandated dispensing fee of $10.49 per prescription will increase, not decrease, costs for plan sponsors as well as patients.
So, where’s the Trojan Horse in all of this? The Trojan Horse enters the picture because the regulations in some states directly impact self-funded health plan sponsors. For example, under the new Florida law, self-funded plans cannot require participants to fill prescriptions for maintenance medications through mail order. Nor can self-funded plans use copay incentives to encourage plan participants to fill prescriptions at network pharmacies or mail order. The days of a 90 days’ supply at mail order for 2 times the retail copay are gone!
Hold your horses! Aren’t self-insured ERISA plans exempt from state PBM regulations. No – a recent Supreme Court decision found that ERISA did not preempt state PBM regulations. As a result, self-funded plans are required to comply with the state regulations, making it difficult if not impossible to provide active and retired workers a uniform, cost-effective prescription drug benefit regardless of their place of residence.
States are not the only ones taking on PBM reform. At the federal level, House and Senate committees are holding hearings and actively working on proposed PBM legislation. Some of the proposed regulations, like those of the states, can result in higher patient and plan sponsor costs. The upcoming months are sure to be an exciting ride!
Happy Reading!
Suzanne Daniels
- Hitting the Headlines: state healthcare report cards, hassles of health insurance and consumer survey results.
- In the Crosshairs: PBM “bad boys,” value of PBMs & support for PBM reform grows.
- On the Rx Front: quality problems in India, $3.2 M gene therapy, & generic drug manufacturers bail.
- Curiosity Corner: including my personal favorite, See the Titanic in Stunning Detail With New 3D Scan!
Hitting the Headlines
Commonwealth Fund
2023 Scorecard on State Health System Performance
New York Times
It’s Not Just You: Many Americans Face Insurance Obstacles Over Medical Care and Bills
KFF
KFF Survey of Consumer Experiences with Health Insurance
In the Crosshairs
The Hill
What history tells us about your prescription costs and the new ‘bad boys’ of health care
NBER
The Value of Pharmacy Benefit Management
Commonwealth Fund
Bipartisan Congressional Support for PBM Reform Grows
On the Rx Front
Wall Street Journal
Drug Shortages Stem From Quality Problems in Indian Factories
Wall Street Journal
The Price of First Gene Therapy for Muscular Dystrophy: $3.2 Million
KFF Health News
Drugmakers Are Abandoning Cheap Generics, and Now US Cancer Patients Can’t Get Meds
Curiosity Corner
Smithsonian Magazine
Curly Hair Keeps the Head Coolest
Great Lakes Now
Culinary masters aboard Great Lakes freighters: Navigating the high seas of flavor
Smithsonian Magazine
See the Titanic in Stunning Detail With New 3D Scan
Enjoy the weekend!
Best,
Suzanne
Suzanne Daniels, Ph.D.
AEPC President
P.O. Box 1416
Birmingham, MI 48012
Office: (248) 792-2187
Email: [email protected]