Policymakers should support mail-order pharmacies
Pharmacy benefit managers play an essential role in the industry
The Covid-19 pandemic has made our world look very different. Remote, contact-free and online services are not only preferred, but expected, to prevent virus spread.
This is particularly true for those who are older — a population so at risk from Covid-19 that four MIT economists wrote an academic paper suggesting those 65 and older would optimally quarantine for 18 months or until a vaccine is available.
Let’s assume that strategy will not be employed. But mobile and remote health options — like telemedicine and mail-order prescription programs — have become essential for the continued health and safety of millions of Americans, seemingly overnight. Even assuming we emerge from the Covid-19 pandemic, policymakers must continue to support such services.
In the last week of March, with state stay-at-home orders in place, mail-order prescriptions grew by 21% over the previous year.
Mail-order prescription use mirrors the explosive growth of online retail and service companies such as Amazon, DoorDash and others who help customers stay home.
Pharmacy benefit managers, or PBMs, play an essential role in the continued growth of these offerings. When mail-service pharmacies partner with PBMs, they’re able to offer greater discounts and increased use of generics, leading to lower costs for patients, health insurance providers and employers.
Consumer savings from mail-service pharmacies have been estimated at over $59.6 billion from 2015 to 2024. That’s over $5 billion per year that patients can use to invest in their health in other ways — and that health insurance providers and employers can use to further improve coverage and benefits.
This may be bad news for the drug lobby, which hates the fact that PBMs have the scale to leverage savings, but good news for seniors, since prescription drug utilization increases exponentially with age.
A Georgetown University analysis found that those between the ages of 65 and 79 filled an average of 20 prescriptions annually, and paid much higher out-of-pocket costs. A study showed that at least one-fifth of those 65 and older skipped doses to make prescriptions last longer, or cut back on other necessities (including food) to afford drug costs.
Mail-service pharmacies can also save patients money by offering longer-term prescriptions. That also keeps patients from running out — an added benefit for seniors who must keep up with multiple prescriptions at once.
Big Pharma has underwritten studies suggesting PBMs — not drug companies — should be restrained. They have found sympathy among some policymakers who welcome Pharma’s campaign checks.
As someone who has long worked in healthcare and written academically about it, I urge caution in embracing simplistic solutions.
Are we to believe drug companies are blameless? Their hope is that if PBMs lose their own profit incentive, they will not negotiate savings for consumers. Indeed, the Trump administration is reportedly resurrecting an anti-PBM idea previously shelved because it would actually raise drug prices for seniors on Medicare.
One of the most insidious examples of drug price-gouging has been insulin.
When the current secretary of the U.S. Department of Health and Human Services was an executive at Eli Lilly, the price of insulin tripled. Insulin has been around since 1922, when its patent was sold for only $3 by the researchers who discovered it and felt it wrong to profit from it. Today many diabetics must dangerously ration their insulin to afford it. One shudders to imagine the future profiteering from Covid-19 treatments and vaccines developed largely through government funding.
Lower costs and no-contact delivery make mail-order prescriptions one of the most promising healthcare services available in a Covid-19 world. Let’s keep it that way. It’s up to policymakers and healthcare companies to support the PBMs and mail-service pharmacies who make prescription delivery possible.
Brendan Williams is president and CEO of the New Hampshire Health Care Association in Pembroke.