A 6-year-old boy with asthma visits his doctor, who prescribes a daily inhaler. His grandmother goes to pick it up at the pharmacy and learns that it is not covered by insurance and will cost her $300 a month, so she calls the doctor’s office to ask for help. A nurse spends 45 minutes on the phone with an insurance company and 30 minutes completing forms to obtain coverage for this necessary medication. Finally, after a couple days, the insurance company grants coverage — but it is too late. The patient required admission to the hospital for a severe asthma attack.
I am that nurse. I work at a clinic in a large children’s hospital and this patient, and countless others like him, are all too familiar to me. They have health insurance. A qualified provider prescribes them well-researched, effective drugs. Yet, these patients either cannot afford the medication they need or cannot get it on time.
This situation is not inevitable. It is instead the result of one particularly pernicious aspect of our for-profit healthcare system: pharmacy benefit managers (PBMs). They manage prescription drug benefits on behalf of health insurance plans and prioritize profits over patient care.
PBMs’ stated purpose is to control the cost of prescription drugs by negotiating with pharmaceutical companies and creating formularies — a list of acceptable, covered drugs — that prioritize the most clinically- and cost-effective medications for patients’ conditions. However, the reality that PBMs create for patients and the healthcare system achieves the opposite. PBMs’ narrow formularies often include only one or two options for a particular drug, limiting patient and provider autonomy.
Moreover, PBMs usually develop these formularies not by identifying the drugs that have the most impact on patient outcomes but instead by the size of cost-saving rebates PBMs negotiate with pharmaceutical companies. Rather than being able to use the medication chosen by their healthcare provider, patients are forced to accept a medication selected by a for-profit entity that knows nothing about their individual health and circumstances.
To bypass the PBM’s formulary and get the medication they need, patients and providers must go through a prior authorization process. Prior authorizations involve submitting an explanation about why a patient needs a particular drug instead of the one the PBM has chosen for them.
Submissions require a phone call, fax, or use of a cumbersome online portal, and patients must wait days — sometimes weeks — for a response from a PBM. In many cases, PBMs require that patients have tried and failed therapy on their preferred drugs before they will grant the medication that the patient and their provider have chosen.
Prior authorizations waste time and money: a recent survey of physicians found that providers and their staff spend an average of 13 hours per week completing them instead of spending that time on direct patient care. Almost all of them (93%) have had patients’ care delayed by the prior authorization process. One-third of providers report that waiting for a prior authorization led to a serious adverse event for their patients, just like that little boy with asthma whose lack of medication access resulted in a medical emergency and hospital visit.
Meanwhile, PBMs’ use of formularies and spread pricing — wherein they charge payers or health plans more money for medication than they pay pharmacies for that medication — are making them record profits, which increased from $25 to $28 billion between 2017 and 2019. It is critical to protect patients by curbing PBMs’ greedy practices.
To do this, we need legislation that empowers the federal government to negotiate drug prices with pharmaceutical companies directly. This idea is extremely popular among Americans: recent polling shows 77% of Republicans, 89% of Independents, and 96% of Democrats favor the federal government negotiating lower prices for medications.
Earlier this week, the Senate passed the Inflation Reduction Act, which enables the federal government to do this for the first time for a select number of drugs under Medicare. This legislation is far from perfect and it does not go as far as it should in curbing the profit motive that has no business in healthcare, but it is a solid first step in the battle against pharmaceutical and PBM greed.
We must build on this momentum and encourage our legislative officials to expand these rules to Medicaid and private insurance plans, and to continue to eliminate red tape and financial barriers that prevent people from accessing the medicine they need. We cannot afford for PBMs to waste our time and money while people’s health hangs in the balance.
Lela Kanter, MSN, RN, CPN, is a registered nurse at Children’s National Hospital and a nurse practitioner student at Catholic University of America.