Why This PBM Comparison Is a Bit of a Whopper

May 16, 2017

Are pharmacies really comparable to fast-food outlets?

“Pharmacies are as common as fast food restaurants. Today, there are more drugstores in the U.S. than McDonald’s, Burger Kings, Pizza Huts, Wendy’s, Taco Bells, Kentucky Fried Chickens, Domino’s Pizzas, and Dunkin’ Donuts combined, creating a highly competitive environment.” -From the Pharmacy Care Management Association website

Sometimes I have to scratch my head at the extent to which pharmacy benefit managers (PBMs) will go to try to validate their anticompetitive business practices. Take the statement above, one of the PBMs’ justifications for creating restricted pharmacy networks that limit pharmacy patient choice.

Granted, implying that community pharmacies are the health-care equivalent of fast food restaurants is just ignorant in the first place. But it’s also a comparison that argues against limited networks, not for them.

Related article: Why PBMs Lead in Prescription Revenue Growth

Here’s the PBMs’ argument: Because there are so many pharmacies, they’re all just like fast-food restaurants-there’s one on every corner, and one is really no better than another. Your care is just as good when provided by a PBM-owned mail order pharmacy (and 800 number) as it is by the local community pharmacist you’ve used for years.

So in an effort to squeeze costs out of that marketplace of abundant providers-fast pharmacy?-the PBM selects a group of those pharmacies that’ll meet its pricing demands, and then requires patients to use those “preferred” or “limited” networks of pharmacies – regardless of whether those pharmacies are convenient for the patient. In fact, regardless of the patient at all.

Pharmacy care isn’t fast food, of course. Managing medications isn’t like ordering a double cheeseburger, hold the pickle. And you shouldn’t trust the sketchy middlemen who suggest it is.

PBMs want to choose your pharmacist for you, not based on what’s best for you, but on what’s best for their bottom lines. In fact, it’s one of their big talking points: Letting them choose your pharmacist for you from among all those “fast food” pharmacies could save billions, they say.

But that’s not how it works, and the PBMs’ ill-considered fast food analogy makes that pretty clear.

Just because there are a lot of something doesn’t mean they’re all the same.

Up next: What's the difference?

 

In the fast food world, prices are low because consumers have choices. There are no “fast food benefit managers” selecting restaurants-no middlemen trying to convince Coca-Cola drinkers that Pepsi is “therapeutically equivalent,” or that hash browns are a reasonable substitute for French fries, or that they’ll mail you your vanilla latte in seven to 10 business days.

No. Instead, consumers vote with their feet: Chick-fil-A or Roy Rogers or Taco Bell. Wide-open competition doesn’t inhibit lower prices, it creates lower prices-and varied product lines as well.

You can choose McDonald’s over Wendy’s over Five Guys. But PBMs want to deny you the ability to choose a pharmacy, arguing that when the PBM chooses for you, prices will fall because those pharmacies will compete not for patients, but for the PBMs’ blessing.

Related article: DIRs: PBMs Pay Less Each Year While Prices Go Up

Instead of competing based on convenience or how well they meet the needs of their patients, retail pharmacies are expected to compete based on the mandates of the PBM’s little network. The PBM, not the patient, determines what drugs will be made available. The PBM, not the patient, decides whether mail order is better-whether an out-of-state customer service line is really as good as their local pharmacist.

And that’s where the whole pharmacy-is-like-fast-food analogy falls apart pretty quickly. With the PBMs’ restrictive networks, it’s like being assigned a restaurant that’s not only on the other side of town but may not even serve the kind of food you like.

If Congress is serious about lowering health-care costs by giving Medicare patients real choices, it should pass pharmacy choice legislation, recently introduced in Congress and supported by the NCPA. H.R. 1939, the Ensuring Seniors Access to Local Pharmacies Act of 2017, introduced by Reps. Morgan Griffith (R-VA) and Peter Welch (D-VT). Its purpose is simple: By allowing patients to choose any local pharmacy willing to meet the pricing terms of PBM network contracts, the legislation gives seniors more convenient access to discounted copays for prescription drugs. Moreover, it increases competition among pharmacies and Part D drug plans, and therefore stands to produce cost savings for the government and taxpayers.

If PBMs insist on using their ill-chosen fast food analogy, they would realize that in the fast food world customers choose for themselves. There’s no need for middlemen like PBMs at all.

And that’s why, although PBMs talk a good game, their assertion that limited networks expand patient choice is a bit of (ahem) . . . a Whopper.