On January 25th, ASBM’s Immediate Past Chair Madelaine Feldman, MD FACR participated in a webinar entitiled “What’s the Hold-Up? Overcoming Barriers to the Use of Biosimilars,” hosted by The Center for Biosimilars. At the forum, Dr. Feldman discussed the role of payers like insurance companies and pharmacy benefit managers (PBMs) in contributing to higher drug costs.
Although there are cases where providers choose not to prescribe biosimilars, in others it may be due to physicians ultimately losing the ability to choose a therapy for their patients based on what is the lowest priced product or what is in the practice’s inventory, according to Dr. Feldman, who is president of the Coalition of State Rheumatology Organizations.
Savings and rebates that payers negotiate with manufacturers are often not designed to save patients money, Dr. Feldman explains, but are instead intended to increase profits for payers, who often negotiate contracts with companies to place more expensive products on formularies:
“Cost and price are 2 different things and when the middlemen talk about why we choose the lowest net costs, that actually means the highest profit. Their fiduciary responsibility is to their shareholders. It’s unfortunate but it’s the truth. It is not to the health care system, it is not to patients, and it is not to providers. And anything that they can do to increase their profit involves using higher price drugs because…all of the price concessions are a percentage of the list price.”
Dr. Feldman recently testified about PBM practices testified at a public hearing of the Congressional Oversight Committee entitled “Reviewing the Role of Pharmacy Benefit Managers in Pharmaceutical Markets”, held November 17th, 2021. From Dr. Feldman’s testimony:
The out-of-pocket costs for these miraculous RA medications – as well as medications for many other serious, chronic illnesses – have risen to levels where many patients simply can no longer afford them, and that is true even for biosimilars. Clearly, something is not working the way Congress intended. That something begins with the formulary…
High drug prices are not a mere byproduct of this system; they are at the heart of its design, since a drug’s list price must be high so as to offer “headroom” for these discounts, rebates, and fees to the PBM. This creates a broken market in which competition actually raises prices. In this way, our drug pricing system is more akin to selling a house [winner = highest bidder] than building a house [winner = lowest bidder].
Learn more about Center for Biosimilars webinar here.
Read Dr. Feldman’s testimony about PBM practices here.