Medicare leaders target PBMs, insurance coverage, pharmacy competition

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Pharmacy benefit managers (PBMs) need to shape up their act in the health care market, according to top leaders of the U.S. Centers for Medicare & Medicaid Services (CMS).

PBMs must stop practices “that threaten the sustainability of many pharmacies, impede access to care, and put increased burden on health care providers,” said a Dec. 14, 2023, open letter from CMS Administrator Chiquita Brooks-LaSure and her chief deputy administrators.

“This is especially important for vaccines and treatments that can prevent and treat influenza, COVID-19, and RSV as we enter the winter respiratory virus season,” the letter said.

Prescription drug prices and PBMs have become focal points for scrutiny of the U.S. health care system, not least by the administration of President Joe Biden and by Congress. The CMS letter said the agency’s regulators are concerned about the sustainability of pharmacies, especially small and independent shops in rural and underserved areas.

Chiquita Brooks-LaSure

The letter outlined a number of issues:

• Jan. 1, 2024, will begin the application of pharmacy negotiated price concessions at the point of sale. That has resulted in pharmacy concerns about cash flow, so Medicare Part D plan sponsors and PBMs must work with pharmacies to ensure access for Medicare Part D beneficiaries.
• Some pharmacies are losing money administering vaccines due to low payments from plan sponsors and PBMs working with Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). Plan sponsors and PBMs must ensure adequate payments and should not impede access to vaccines against flu, COVID-19 and respiratory syncytial virus.
• Vertical integration is resulting in anticompetitive behavior that puts independent pharmacies at a disadvantage.
• Insured patients are having difficulty navigating plans and processes for medically necessary contraceptive drugs.
• Medicaid, CHIP, and states must cover child and adult vaccines under the Inflation Reduction Act’s new regulations that became effective Oct. 1. Vaccines for adults are available without cost to patients, if the shots are recommended by the Advisory Committee on Immunization Practices.
• Prior authorizations are impeding access by delaying treatments and taking clinicians away from direct care. New regulations for Medicare Advantage will start Jan. 1, 2024, and “CMS will be conducting robust oversight to ensure Medicare Advantage organizations are complying with these new requirements,” the letter said.

Along with Brooks-LaSure, co-signers were: Jonathan Blum, principal deputy administrator; Meena Seshamani, MD, PhD, Center for Medicare Services director; Daniel Tsai, Medicaid and CHIP Center director; and Ellen Montz, PhD, director of the Center for Consumer Information and Insurance Oversight.