ACR Calls for Drug Pricing Reforms, Urges FTC to Address PBM Practices

In response to the Federal Trade Commission’s (FTC) solicitation for comments, the American College of Rheumatology (ACR) submitted a letter urging the FTC to address the business practices of pharmacy benefit managers (PBMs) that are both driving up costs and reducing access for the 54 million Americans living with rheumatic conditions.

According to ACR president Kenneth Saag, MD, MSc, the FTC’s decision to study these practices is a vital next step toward reforms that will both reduce costs and expand access. As noted in the comment letter, there are currently 3 PBMs that manage 71% of prescription drugs in the US health care system with no fiduciary responsibility to patients.

“PBMs were conceived as an intermediary to negotiate medication prices and maintain drug formularies while taking into consideration the benefits of the treatment and their market cost,” Saag wrote in the letter. “Unfortunately, and largely due to perverse incentives, PBMs quickly became a significant contributor to the high drug prices that plague our health care system.”

The letter also highlighted the various practices of PBMs that have negative impacts on patients, including rebates and fees, barriers such as step therapy and prior authorization, and the administrative burdens placed on clinicians.

The letter cited a study by the University of Southern California Leonard D. Schaeffer Center for Health Policy and Economics that found that, for every $1 increase in rebates, there was a $1.17 increase in the list price, particularly among brand-name products without a generic version.

According to the ACR, rebates and fees can also negatively affect formulary design and patient medication access.

“Ideally, formularies would be designed based on safety and clinical efficacy,” Saag wrote. “However, they are currently designed to maximize rebates from drug manufacturers.”

The ACR also noted how tools used by payers that are intended to reduce costs, such as step therapy and prior authorization, create barriers by creating unnecessary delays in the patient’s access to treatment for their rheumatic condition.

According to a survey by the American Medical Association (AMA), 34% of surveyed physicians said prior authorizations have contributed to severe adverse events among their own patients.

Regarding the burden among clinicians, another AMA survey found that 88% of physicians believe prior authorization is a significant or extreme burden and that, in response to this burden, many practices are forced to employ dedicated staff to handle them.

“While PBMs were originally conceived to help manage the complexities of prescription drug benefits, they have since become massive, consolidated, profit-driven enterprises that exercise immense control over patients’ access to needed treatments,” Saag said. “Their opaque business practices are detrimental to policy efforts to curb the high cost of prescription drugs. Without greater oversight of PBMs, it will be impossible to enact effective drug pricing reforms.”

Saag concluded the letter by calling for drug pricing reforms, saying they are necessary to ensure the health of patients and the sustainability of health care systems.