For Immediate Release
Rare Disease Patients Need Pharmacy Benefit Manager Reform Now
By Khrystal K. Davis, J.D. | Founder and President, Texas Rare Alliance
In the 10 years since my son, Hunter, was born with Spinal Muscular Atrophy (SMA) Type 1, my husband and I have had to become experts on many aspects of the U.S. healthcare system. The doctors prepared us for what would be a short, very difficult journey – Hunter was not expected to make it to his first birthday, because, at the time, there were no treatments for SMA. Initially, we had to look outside the U.S. to access experimental treatments because Hunter did not qualify here. Fortunately, we found a researcher in Mexico who administered the experimental treatment and saved our son’s life. Thankfully, the FDA approved the first SMA treatment in December 2016, giving new hope for our son and the tens of thousands of other Americans who also suffer from the disease.
Today, as Hunter has celebrated his 10th birthday, I continue to advocate for him, as well as other families whose loved ones have a rare disease or disorder. Although we celebrate each new scientific advance and discovery that leads to new therapies, these often require a battle to access and afford innovative treatments.
Healthcare is expensive, especially for people with rare, chronic, or complex conditions. Emergency room visits, hospital stays, doctor’s appointments, labs, screenings, and medications mean out-of-pocket costs can quickly become overwhelming, regardless of your insurance plan. Thankfully, there’s a simple, direct solution to lowering out-of-pocket costs for prescription medications – addressing the role of little-known drug supply chain middlemen.
As elected officials debate how to curb the rising prescription drug costs, there is a need to increase transparency and oversight over middlemen Fortune 500 companies known as pharmacy benefit managers (PBMs). These corporations are some of the largest and most profitable entities in the country, using their outsize market share to negotiate large rebates and discounts with drug manufacturers. PBMs claim to lower out-of-pocket costs by passing these negotiated savings onto patients, but the reality is that PBMs often pocket the rebates for themselves while out-of-pocket costs continue to rise.
Their outsize market share – three PBMs control 76% of the market – allows them to employ opaque and unfair business practices to enrich themselves at the expense of everyone else. “Price protection” clauses, for example, cap list price increases – or the amount the drug costs at the pharmacy counter – at 12% annually. This may sound like PBMs are doing what they’re supposed to – lowering prices for consumers, but these clauses effectively guarantee PBMs a 12% profit increase year after year.
So how much money are PBMs collecting thanks to harmful tactics they employ? In 2018, these corporate middlemen collected an astounding $166 billion. Yet patients and families are paying significantly more out-of-pocket than it costs to produce the drug, for the prescriptions we need.
Our Washington representatives can learn a thing or two from our legislators in Austin, as well as from dozens of states across the country. In Texas, the Legislature overwhelmingly passed House Bills 1763 and 1919, which are designed to protect independent pharmacists who are often undercut by PBMs, and prevent “patient steering.” These bills are a start, but even together they aren’t a comprehensive solution to the issue.
For Texans who rely on prescription medications, the answer is simple. We need Congress to address the way PBMs use their outsize market share to profit at the expense of everyone else in the drug supply chain – especially patients. PBM reform would go a long way toward ensuring that millions of patients – including my son – can afford and have access to lifesaving drugs they need.
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Khrystal K. Davis, JD, is the mother of Hunter and the founder of the Texas Rare Alliance, a rare disease advocacy organization based in Austin.