Time to Expose Discriminatory Formulary Practices

Janson Silvers  0:02  
Welcome to Healthcare Policy Pop. I'm Janson Silvers it's Tuesday November 28, 2023.

Today's pop topics: discriminatory formulary practices. Just days after the Patient Access and Affordability Project released its report on discriminatory formulary practices, the Global Healthy Living Foundation hosted his own event about the impact of formulary exclusions on patients. The takeaways from both: PBMs use a myriad of tactics to influence formulary decisions that ultimately harm patients. Dr. Robert Popovian Chief Science Policy Officer for the Global Healthy Living Foundation says these discriminatory practices have continued to become more prevalent. 

Dr. Robert Popovian  0:46  
There's been an increase year over year of formulary exclusions of all three large PBMs. And if you look at the average is about 34% on average over the last decade. And the reason this is concerning is because formularies initially were constructed as a way to promote, you know, cost effective medicines generic medicines as the primary uses, now formularies have turned into a mechanism for pharmacy benefit management companies to maximize profitability and maximize rebate contracting. 

Janson Silvers  1:21  
Popovian says one of these practices is removing certain drugs from coverage, blocking patients from their treatments.

Dr. Robert Popovian  1:27  
There are drugs within the formulary that the PBM Express Scripts has eliminated from coverage. And they've provided no other alternative for those patients. So in other words, if you're a patient on one of those drugs, you have no other alternative. They can't even recommend an alternative because there isn't one. But guess what? About 20 drugs have been eliminated without an alternative. 

Janson Silvers  1:51  
Popovian says this is one of the few areas in healthcare where negotiations actually hurt the patient instead of help. 

Dr. Robert Popovian  1:59  
That is not the case in pharmaceuticals in every other segment of the healthcare system, patient benefits from those negotiations, except for drugs, somehow PBMs have bamboozled the entire industry policymakers starting with policymakers, but also employers and other factions within the healthcare system, that what ends up happening for every other segment cannot happen for pharmaceuticals. 

Janson Silvers  2:21  
Why is this the case? He says it comes down to how rebates work in the current system. 

Dr. Robert Popovian  2:26  
It has to be about rebate contracting. I mean, when you look at some of the exclusions, it makes absolutely no sense right. Let's start with about 20 drugs within the ESI formulary. Year over year, there has been an increase of generics being excluded and brand names being included. Why is that is because of rebate contracting 

Janson Silvers  2:47  
Popovian and says patients and advocacy organizations like Patients Rising can make a difference by continuing to push for transparency. 

Dr. Robert Popovian  2:56  
If we have a better transparent model, where patients are then benefiting from all of the concessions and rebates and everything else. And instead of being hoarded by the PBMs, then it would be to the benefit of the patients and it would remove misaligned incentives that create that formulary decisions.

Janson Silvers  3:17  
A link to the Global Healthy Living foundations webinar is in the shownotes.

Next today, a new article in Forbes says what we've known for a while, quote, "insured Americans have been getting ripped off for years." Two states though, are taking action to protect themselves. New state laws in Tennessee and Texas now provide insured Americans on individual small business plants the option to save money when they pay cash for more affordable services, while still getting deductible credit, according to that article. An example of our backwards system, Forbes, as they called to some offices in Nashville, and found they could pay a little more than $500 in cash for a colonoscopy, which was much less than the $2,400 average rate that insurance had negotiated. Their article is eye opening and we encourage you to read it by using the link in the show notes. That's all for today. We're back on Thursday for another Healthcare Policy Pop, a resource of Patients Rising Now. I'm Jason Silvers, have a great day.