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Op-Ed: Louisiana leads nation in creating environment of drug-price transparency

While no one disputes the high cost of health care, it seems everyone has an opinion about what would happen to prescription drug costs if pharmacy benefit manager (PBM) middlemen were required to act in the interest of Louisiana employers and our hard-working families.

Despite criticism to the contrary, Louisiana has led the nation in passing laws that promote drug price transparency. Our elected leaders were among the first to pass legislation prohibiting the use of PBM contract “gag clauses” that prevented pharmacists from disclosing to patients whether a lower-priced but therapeutically equivalent drug was available.

Ending the use of gag clauses and other opaque PBM business practices, including steering patients to PBM-owned or affiliated pharmacies, has gone a long way to protect Louisiana’s hard-working families from paying too much at the pharmacy counter, while also protecting local employers from paying higher-than-necessary premiums each month.

Transparency’s most vocal critic is the PBM trade association, the Pharmaceutical Care Management Association (PCMA), a $28.5 million lobby representing the 18 largest PBMs in the country. PCMA commissioned the Visante report referenced in a previous op-ed.

PCMA’s three largest members – CVS Caremark, OptumRx and Express Scripts – together hold 80% of the market. That means 80% of all prescriptions processed in the U.S. go through one of the “Big Three” and each of the “Big Three” own or are owned by health insurers ranking fourth, fifth and 13th, respectively, on the Fortune 500. With that kind of market share to protect, PBM spokespeople naturally will say transparency will drive up consumer costs at the pharmacy.

Extreme market consolidation allows the largest PBMs to contractually forbid small business pharmacies from offering everyday services such as prescription drug delivery. PBMs can and do bar independent pharmacies from dispensing certain “specialty” medications, routing such prescriptions to their own pharmacies under exclusive rights they’ve given themselves – even though an independent pharmacy meets the qualifications to dispense specialty medications.

Like “Big Tech,” in which you either accept your smart phone’s terms and conditions or you can’t use your phone, “Big PBMs” are a “take-it-or-leave it” proposition – for everyone. In the end, it’s the consumers who pay the price for the rigid benefit plan rules that prevent them from using the pharmacy provider of their choice.

Louisiana’s independent pharmacies are committed to transparency, and will continue to put the needs of patients and local employer plan payers first as we attempt to work with the opposition. Working together, we’re confident Louisianans will reap the benefits of a fair, equitable and transparent healthcare environment.

Randal Johnson is president and chief executive officer of the Louisiana Independent Pharmacies Association.


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