Encourage Senator Grassley to Investigate GPOs

Senator Grassley has introduced a good bill, S 1227, that would launch an FTC investigation into anti-competitive actions of Pharmacy Benefits Managers. The bill would be even better if it specifically required the FTC to also investigate similar practices by Group Purchasing Organizations (GPOs). Please call Senator Grassley’s office at 202-224-3744 and encourage him to add an investigation of Group Purchasing Organizations to S 1227, the Prescription Pricing for the People Act of 2019.

For more details, see the below letter from AAPS to Sen. Grassley, and this important video, from Physicians for Reform, explaining how PBMs and GPOs are driving the cost crisis while improperly interfering in patient care:

August 21, 2019

The Honorable Charles Grassley
Chairman, United States Senate Committee on Finance
219 Dirksen Senate Office Building
Washington DC, 20510

Dear Chairman Grassley:

We are grateful for your work to find market-based solutions to lower the cost to patients and taxpayers of medical care and medications.

Thank you for introducing S. 1227, the Prescription Pricing for the People Act of 2019 directing the Federal Trade Commission to investigate the middlemen who are driving up costs without adding value. The Association of American Physicians and Surgeons (AAPS) supports this bill, but we are writing to ask you to consider making one change.

Although you mentioned Group Purchasing Organizations (GPOs) in the Chairman’s comments about the bill, as we currently read S. 1227 it does not expressly require an investigation into the activities of Group Purchasing Organizations (GPOs).  We respectfully ask that you consider amending the bill to specifically name GPOs as entities that the FTC is charged with investigating.

In our view, GPO abuse of the rebate safe harbor they were granted to the Medicare anti-kickback statute is an under-appreciated culprit increasing the cost of critical drugs and medical supplies used in hospital settings, while simultaneously causing or exacerbating shortages.

While the impact on prices caused by Pharmacy Benefits Managers is now on Congress’ radar screen, the harmful impact of GPOs has been all but ignored. This may be because patients do not see the direct effect. However anesthesiologists and emergency room physicians know all too well how the anti-competitive actions of these middlemen are putting patients’ lives at risk. They have been compelled to use drugs that may not be ideal for the patient, adding unnecessary challenges to delivering quality patient care. 

It is unacceptable for the United States to be in short supply of saline and common anesthesia and emergency room drugs for any reason. It is particularly shameful when the shortages are caused by those who abuse the shield of government protection from market forces and laws that would otherwise curb their harmful actions.

Thank you for considering our request and please do not hesitate to reach out to us anytime for further discussion.

Sincerely,

Marilyn M. Singleton, M.D., J.D.
President, Association of American Physicians & Surgeons

What is the Major Contributing Factor to the High Costs of Your Prescription Medications?

By N. Lois Adams, Consultant Pharmacist, MBA, HHCS HEALTH GROUP OF COMPANIES, LLC.

Have you ever heard of the “PBMs”?  No?  Well join the huge group of people- seniors, employers, workers-who look at me with the thousand- foot, stare in their eyes when I mention that term. I almost always get the answer. NO, what is that.

They, my friend, are the Prescription Benefits Managers or PBMs.. entities who have taken over a great part of the delivery of health care and have caused the prices to escalate upwards dramatically.

These entities started out as companies which only processed pharmacy prescription claims for insurance companies for you, the employee, the consumer, and any other person who received medicine which had to be billed to an insurance company so that they would receive reimbursement. Now they have morphed into gigantic entities which make billions of dollars at yours, the employers, the government entities, and others expense. They are no longer in the background of medicine. They are running many parts of it. 

They started out by touting that they ( the PBMs) would save all of us money.  They convinced the insurers that they could save money by establishing drug formularies whereby they divided medical problems into categories and developed drug lists which allegedly would contain necessary drugs in each category so that the physician could choose one of those to treat his or her patient. This was a beginning in medical practice whereby the physician could only choose a drug that was on “their” formulary in “their” designated category- no matter if that was the drug of choice to treat the disease or not. And how, in many cases, did they choose the drug in each category? Well, simple. They selected those drugs from manufacturers who gave them the largest rebates. It may not be the best drug for that particular condition but it was the only one “their” formulary would permit.

Then came the “Prior Authorization” (P.A) debacle which is the bain of the physician’s office staff’s existence. As a practicing pharmacist for over 50 years and the owner of pharmacy entities, I have interviewed people for employment at my organizations who have told me that most of those people who are engaged with giving decisions as to whether you need the drug or not, have no idea what the professional is asking them. They are , in many cases, only following a script and do not have any knowledge or training in medicine, the disease, pharmacology, etc. regarding the question as to whether the drug should be approved so that the physician may prescribe it..And the insurer can pay for it. It became my practice, if I was denied, to ask to speak with their Medical Director because “he had to be licensed somewhere.” This was only because the ill-informed gatekeeper would end the inquiry there and not allow any further questioning.

Their “off shore” offices were another step in obstruction. I was told that they would get back with me-perhaps in 2 weeks. My patient needed the medication and that was not sufficient. The next step was to “demand” that I be transferred back to the United States and I allowed  to speak with their medical director.  That usually was successful. The issue here also is that many office personnel or health care companies do not understand the lengths to which one must go to get approval and then what happens in that situation.? You get improper or inferior medical treatment.

It is necessary to enlighten my readers to let them know that the entire system and quality is based upon the number and amount of the rebates given by the pharmaceutical industry to the PBMs. Your doctor can no longer practice medicine in the way that he knows best…he has to engage the PBMs for permission to use the drug of choice. That is where we are today. It is “medicine by rebate”. I sincerely hope that our President will understand who the real culprit of rising medication costs is and take action to rescind the “Safe Harbor” laws so that the PBMs can no longer hide behind laws and regulations that only serve as a “Safe Harbor” for them…and certainly not for you and me.

I will be giving you more insight on the high cost of prescriptions for you and your family in a following column.  Please address any of your questions to me at , “ASK YOUR PHARMACIST”   Newsletter @AmacFoundation.org