BY GABE HERMAN | Independent pharmacy owners rallied in late October at City Hall — and nine other cities throughout New York State — to support legislation that would increase regulations on prescription drug middlemen, who are known as pharmacy benefit managers (PBMs).
The Oct. 23 rally at City Hall included hundreds of supporters and pharmacists, including employees of the longtime Greenwich Village pharmacy Village Apothecary at 346 Bleecker St. It was organized by FixRx, a campaign by Pharmacists Society of the State of New York (PSSNY) and the New York City Pharmacists Society (NYCPS) to advocate for health care reforms related to pharmacies and prescription drugs.
The rally was in support of legislation that passed the State Assembly and State Senate in June. It has not yet been delivered to Governor Andrew Cuomo, who is expected to sign it into law.
The legislation would require that PBMs are regulated and licensed. As it is now, PBM fees in the prescription drug delivery process pass along higher costs to pharmacies and customers, like “spread pricing” in Medicaid Managed Care, which provided hundreds of millions of dollars to PBMs in New York State in 2018.
“The legislation would be a major step forward in the fight against PBMs,” said Parthiv Shah, Chairman of the NYCPS. “We need to ensure that pharmacists, patients, and taxpayers alike are being guarded against their abusive and deceptive practices. It is time to shine the light brightly on these greedy corporate middlemen.”
Pharmacy organization studies have shown that pharmacies lose money nearly 50 percent of the time when filling prescriptions under Medicare Managed Care plans, noted Village Apothecary pharmacist John Kaliabakos. As a result, 70 percent of New York pharmacies in 2019 have had to lay off employees or reduce store hours. That number is projected to increase to 90 percent, he noted, if changes aren’t made in the reimbursement system.
“Village Apothecary and other independent pharmacies are fighting hard behind the scenes every day to ensure that patients receive the highest quality care,” Kaliabakos told The Villager, “and we ask for the community’s support in the ongoing battle against the questionable practices of these PBMs and insurance companies.”
“We applaud the Governor for his leadership over the last few years and for taking the steps to make real change in the way that PBMs are able to operate,” said Steve Moore, President of PSSNY. “We look forward to the increased PBM oversight and transparency that this legislation makes possible.”
In January 2019, a State Senate committee opened an investigation into the practices of PBMs in New York State. This led to an early June report, whose findings included a lack of transparency and oversight of PBMs, which allowed them “to engage in self-dealing to the detriment of consumers across New York State,” and recommended regulation and to require licenses.
In response to the June report, the Pharmaceutical Care Management Association (PCMA), which represents the nation’s PBMs, disputed the report’s findings.
“This report attempts to undermine the only industry that is reducing prescription drug costs for New York’s employers and consumers,” said PCMA President and CEO JC Scott. “The truth is PBMs advocate for consumers and health plan sponsors to keep prescription drugs accessible and affordable. In fact, in New York PBMs will save $39.9 billion across all the state’s health programs over 10 years.”
PCMA further said in the June statement, “We believe that more can be done to address rising drug prices. We stand ready to work with New York lawmakers to increase competition and build on market-based tools in public programs and private health insurance.”