Dear supporters,
In this video, this pharmacist does a great job of explaining the true reason why patients are forced to mail order pharmacy. The reason has little to do with saving patients, employers, or taxpayers money but evading a rule called the Medical Loss Ratio (MLR) that was enacted under the Affordable Care Act that meant insurance companies couldn't profit more than 15%.
In order to evade the new rule, the largest insurance companies merged with pharmacy benefit managers (PBMs) that all own mail order pharmacies and started forcefully steering patients to them. PBMs oversee how much they are reimbursed, how much their competitors' are reimbursed, which pharmacies patients can use, what medications are covered on the formulary, and how much patients will pay at their own pharmacies as well as at the counters of their competitors. The largest three pharmacy benefit managers are Optum RX, CVS Caremark, and Express Scripts.
By merging, the 3 found many ways to evade the 15% rule. PBMs steering patients to their own mail-order pharmacies increases costs and creates warped incentives by:
Higher Drug Prices: Mail-order pharmacies may not offer competitive pricing compared to retail options, leading to overall inflated costs for medications. Even when they offer a low copay to use their mail order, behind the curtain, they often pay their own pharmacies more than their competitors.
Profit Maximization: PBMs profit from the often massive difference between what they pay pharmacies and what they charge health plans, incentivizing them to prioritize revenue over patient care.
Reduced Patient Choice: Steering patients to mail-order services limits competition, which can lead to higher prices and fewer options for consumers.
Hidden Costs: Patients might face unexpected fees, shipping costs, or higher prices at retail pharmacies, increasing their out-of-pocket expenses.
Overutilization of High-Cost Drugs: PBMs may demand more expensive brand-name medications over generics, driving unnecessary spending.
Opaque Pricing: Lack of transparency in PBM agreements can lead to inflated costs, leaving health plans unaware of true expenses.
Misaligned Interests: Financial incentives may push PBMs to prioritize profits over patient needs, distorting medication choice.
Regulatory Evasion: PBMs might technically meet MLR requirements while overall spending increases.
Overall, these practices lead to higher healthcare costs and reduced patient choice, highlighting the need for greater regulation of PBMs.
Share this with your legislators alongside the petition. Ask your member of congress to cosponsor HR 9096 that would help to stop these practices of insurance companies' pharmacy benefit managers steering to their own mail order and retail pharmacies.
Thank you,
Loretta Boesing, Patient Advocate