WASHINGTON — Three Wall Street-owned Pharmacy Benefit Managers (PBMs) control the lion’s share of the prescription drug market. They are supposed to save companies and consumers money, but instead they funnel any savings back to insurers and drug companies.
In a Townhall.com op-ed, Katy Talento, executive director of The Alliance of Health Care Sharing Ministries (The Alliance, ahcsm.org), explains why government intervention might be necessary to help beleaguered consumers.
In her piece, “In defense of Americans against Pharmacy Benefit Managers,” Talento, a former Special Assistant to the President for Domestic Policy, lays out the reasons why PBMs are a bad deal:
“The PBM industry, with only three giant companies controlling almost 80 percent of the market, offers a seemingly simple value proposition: if you’re an employer or an insurance carrier serving individuals or businesses, hire the PBM to help you get volume discounts on prescription drug makers.
“Sounds great! But, what if these middlemen pocketed much of the savings instead of passing them on to employers? What if they only allowed patients access to products that delivered the biggest kickback to the PBM, instead of cheaper and equally effective drugs? What if they merged with insurers administering employer plans, instead of having to compete for their business? What if the newly merged PBM/insurer refused to allow employers to hire a different PBM or specialty or mail-order pharmacy other than the one their insurer owns? What if PBMs sued the federal government to block a regulation that would have required them to disclose to employers the size of their kickbacks?
“This is why even free-marketeers are now railing against the market failure that PBMs (and drug makers, insurers, and brokers) have built and enjoyed for so long.”
A free market advocate herself, Talento nonetheless sees room for government intervention to ensure price transparency, which she calls the only reliable way to lower health care costs.
“Health care is neither free nor a market. PBMs are part of that problem. Outside the Beltway, there’s an insurgency of fed-up employers fighting back against the health care industry’s plunder of Main Street,” she wrote.
“Most companies rely on their insurance broker to recommend a PBM, not realizing that PBMs are wholly entangled with insurance companies, which are equally entangled with brokerage houses, creating little incentive to slow down the gravy train. Even worse, most Americans are insured by a policy that doesn’t allow them or their employer to choose their PBM. If they pick Aetna, they get CVS Caremark as their PBM. If they pick United, they get Optum — period.”
She concludes her column this way:
“Despite the caterwauling from the Health Care Swamp, the only way to pay less for health care is to actually pay less for health care. There’s no better starting point than government policies that restore transparency in drug pricing once and for all.”
Unlike health insurance, Health Care Sharing Ministries allow faith-centered people to come together as a community to share each other’s medical expenses, including offering discounted cash price programs for prescription drugs.
“Health Care Sharing Ministries offer less cost, less red tape, and more choices for health care consumers. In addition, members can live out the biblical admonition to show love for one another in practical ways, such as helping with each other’s medical expenses along with prayers and encouragement.”
Members contribute a set monthly amount that is shared with other members to pay their medical bills. Each ministry does this differently. Some have online sharing technology to approve member-to-member sharing of funds. Others have members send individual checks to fellow members. When members go to the doctor, hospital or incur a medical cost, they submit the bill to their community through the ministry. Expenses that meet the ministry’s guidelines are shared by the community and payment is made to the family or directly to the doctor.
Founded in 2007 and headquartered in Washington, D.C., the Alliance of Health Care Sharing Ministries is a 501(c)(6) trade organization representing the common interests of Health Care Sharing Ministries which are facilitating the sharing of health care needs (financial, emotional, and spiritual) by individuals and families, and their participants. The Alliance engages with federal and state regulators, members of the media, and the Christian community to provide accurate and timely information on health care sharing.
To learn more about the Alliance of Health Care Sharing Ministries, visit www.ahcsm.org or follow the ministry on Facebook or Twitter.
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To interview a representative from The Alliance of Health Care Sharing Ministries, contact Media@HamiltonStrategies.com, Beth Bogucki, 610.584.1096, ext. 105.
To interview a representative from The Alliance of Health Care Sharing Ministries, contact Media@HamiltonStrategies.com, Beth Bogucki, 610.584.1096, ext. 105.