Meet a powerful player in the “How Can I Get my ADHD Medication” game: Pharmacy Benefit Managers (PBMs). Few consumers know about them. Yet, they represent a huge and growing factor in limiting access to the ADHD medications you need—especially at the price you used to pay.
Let’s say you’ve identified the medication and dose that works best for you or their child. This typically comes after costly trial and error. You just want to keep getting it—and get on with life! Maybe your prescribers and even your insurers do, too.
Enter PBMs. Most healthcare consumers have not heard of PBMs. But PBMs have heard of us. Beyond the issues with Concerta generics (Concerta archive at ADHD Roller Coaster). Beyond Adderall “shortages”. PBMs have been wreaking havoc with access to medications (especially brands) and affordability.
This post explains a bit about how PBMs might be affecting your access to medications, especially brand medications. If you have concerns, please contact your U.S. congressional representative.
No need for a fancy essay. You can just write a short note and link to this post: “This issue is negatively affecting my family. Please pay attention. PBMs Restrict Access to ADHD Medications”.
Why PBMs Take Center Stage Now
In all my coverage of medication issues since 2014, I haven’t explained how PBMs factor in. Two reasons: Their power has mushroomed only in the last few years, and their role remained hazy to me, especially as so many related factors were shifting:
- For example, CVS being allowed to purchase Aetna, which created an 800-pound gorilla.
- For example, the 2017 White House administration appointing an FDA chief that overrode scientists’ concerns in approving generics for complex-delivery system medications, including Concerta’s
- So many factors to tease out.
Finally, my search for reliable expertise on PBMs, especially as they might be affecting the ADHD community, ended last week. I share an excerpt from a respected ADHD expert’s newspaper guest opinion and a link below. This coincided with a Congressional investigation.
Not New But Growing More Egregious
Many industry observers have viewed with growing concern, over many years: PBMs are making a killing, and there seems no end in sight. (A congressional investigation in May 2023 has been looking into it. Details at the end of this post.)
Things started heating up in 2017. Again, this coincided with the worrisome-for-consumers CVS-Aetna mega-merger and the clown car of Concerta generics.
Also in 2017, Bloomberg reported on PBMs downplaying profit margins (Drug Middlemen Have Slim Profit Margins: Just Ask Them). That’s behind a paywall, so here is Fierce Healthcare take on Bloomberg‘s report : Facing Criticism, PBMs May Be Downplaying Profit Margins.
CVS, Express Scripts and OptumRx had operating-profit margins last year of 4-7%, which are significantly below the 16% average among S&P 500 companies, Bloomberg reported. That’s because they may be booking revenue in a way that shows lower margins.
At issue is the PBMs’ reporting of “pass-through revenue,” or transactions in which the companies processed payments but didn’t handle products. If that is stripped out, Express Scripts’ operating margin more than doubles to 15% in 2016 and CVS’ to 10%, the article noted, citing a recent Morgan Stanley report.
That report said pass-through revenues “cloud the true economics of the PBM business.” It did not speculate as to why.”
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PBMs Affect ADHD Medications
Thank goodness for Ann Childress, MD, and her recent guest opinion in the Las Vegas Sun. Highly informative! I’ll share some highlights and link to it below.
But first, who is Dr. Childress and why should we consider her perspective? (You know what I always say…vet your experts!)
A Few Factoids About Ann Childress, MD
- Internationally recognized expert in the field of ADHD.
- President of the Center for Psychiatry and Behavioral Medicine, Inc. in Las Vegas. Has adjunct faculty appointments at the University of Nevada Las Vegas School of Medicine and Touro University of Nevada College of Medicine.
- Board certified in psychiatry, with a subspecialty in child and adolescent psychiatry.
- Authored more than 80 articles in scientific journals and participated in more than 180 clinical trials as co-principal investigator. Major focus: treatment of children and adolescents with mood disorders, post-traumatic stress disorder, schizophrenia, autism and Attention-Deficit / Hyperactivity Disorder.
- Serves as current President-elect of the American Professional Society of ADHD and Related Disorders (APSARD).
- Distinguished fellow of the American Psychiatric Association and a member of the American Academy of Child and Adolescent Psychiatry.
PBMs’ Negative Impact on ADHD Consumers
Here are a few excerpts from Dr. Childress’s guest-opinion piece:
—Insurers hire PBMs to manage the prescription drug components of their health plans. PBMs negotiate with drug companies to decide which medicines to include on a plan’s “formulary” — the list of medicines an insurer will cover — and at what prices.
—For a given class of similar medications, PBMs will often favor a small number, say one or two, out of a dozen potential treatments. [Gina notes: Thanks to the large selection of FDA-approved stimulant medications, more people have been able to find a proper “fit”.]
—Each new plan year, an insurer’s PBM can reopen talks on coverage and price.
—One of the largest PBMs, OptumRx, announced that it is removing several popular ADHD-treating drugs from its coverage and replacing them with generic versions that might not offer the same bioavailability as their brand-name counterparts.
—CVS’s company-owned PBM plans to limit its coverage of Adderall XR — the drug’s extended-release formulation — and another popular ADHD treatment, Concerta, likewise limiting treatment options for patients.
—All this churning activity is highly lucrative for PBMs. Their gross profits totaled more than $28 billion in 2019. But patients are getting a raw deal. The three largest PBMs together control 80% of the market. The list of their “excluded” drugs grew from 850 in 2020 to more than 1,150 in 2022.
—Fortunately, lawmakers in Washington are beginning to show interest in standing up for patients. [Gina notes: This could be a very mixed bag. Political demagoguing on making more generic drugs available likely contributed to Trump’s FDA Chief loosening generic bioequivalent standards, in my opinion.]
Read the Full Guest Opinion from Ann Childress, MD
PBMs in the Congressional Spotlight
From the non-profit Kaiser Health News, May 11, 2023
The three biggest PBMs — OptumRx, CVS Caremark, and Express Scripts — control about 80% of prescription drug sales in America and are the most profitable parts of the health conglomerates in which they’re nestled.
CVS Health, the fourth-largest U.S. corporation by revenue on Fortune’s list, owns CVS Caremark and the insurer Aetna; UnitedHealth Group, a close fifth, owns Optum; and Cigna, ranking 12th, owns Express Scripts. While serving as middlemen among drugmakers, insurers, and pharmacies, the three corporations also own the highest-grossing specialty drug and mail-order pharmacies.
“John D. Rockefeller would be happy to be alive today,” said David Balto, a former Federal Trade Commission attorney who represents clients suing PBMs. “He could own a PBM and monopolize economic power in ways he never imagined.”
Drug manufacturers claim that exorbitant PBM demands for rebates force them to set high list prices to earn a profit. Independent pharmacists say PBMs are driving them out of business. Physicians blame them for unpredictable, clinically invalid prescribing decisions. And patients complain that PBMs’ choices drain their pocketbooks.
With PBMs driving prices, competition has had the opposite effect from what economic theory predicted Medicare patients would spend out-of-pocket on drugs, one large study showed. Over a five-year period, patients were paying 50% more for branded drugs that had competitors than for those that didn’t.
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If you have personal experience or something else to share on this topic, please leave a comment.