Leave solution to cut prescription prices alone

As pharmacists in New York on the front lines of providing patient care, we can say with certainty that the current prescription system is broken. It’s broken for people with insurance and without insurance, for Medicaid and Medicare recipients, for physicians and pharmacists trying to do right by their patients.

The good news is that in 2020 the State Legislature passed a bill slated to finally fix the system beginning this April.

The bad news is that the legislature’s common-sense fee-for-service solution may be undone by those who have overly and undeservedly profited from the current broken system. They are pouring money into a major lobbying effort to convince the legislature to change its mind before the new system even has a chance to take effect.

How did we get into this mess?

It began 10 years ago when a well-intentioned state experiment to contain costs and improve care backfired.

Pharmacy benefit managers, or PBMs — “middlemen” — were introduced into the pharmacy landscape to negotiate drug availability and pricing, but instead have been siphoning millions of dollars out of the Medicaid program and into their own pockets. A 2019 Pharmacists Society of the State of New York and 3 Axis Advisors report estimated that New York Medicaid was overcharged by PBMs by at least $300 million using a practice called “spread” pricing — the PBM practice of charging payers like Medicaid more than they pay the pharmacy for a medication while the PBM keeps the “spread,” or difference. The actual amount overcharged is likely much higher.

This has meant greater profits for the middlemen. But for patients, it has meant limited access to needed medications, escalating drug prices, and for many communities, a mass exodus of neighborhood pharmacies that could not survive the absurdly poor Medicaid medication reimbursement for pharmacists.

Today, we are on the brink of a solution. The fee-for-service model cuts out the middlemen and pays pharmacies directly for their services. It also bodes well that Gov. Kathy Hochul is making good on promises to require drug price transparency through the state’s Pharmacy Benefit Bureau, which brings much-needed regulatory oversight into the mix.

It’s evident that fee-for-service works, as proved by California’s shift to this new model last January. In its first year, fee-for-service has expanded care and curbed spending on the state’s widely utilized Medi-Cal program. The state was awarded the 2022 Medicaid Innovation Award presented by the Robert Wood Johnson Foundation and the National Academy for State Health Policy, for its work on promising initiatives to transform Medi-Cal.

Fee-for-service can do the same for the people of New York if, at this critical juncture, we tell our lawmakers that we’ve had enough of financially motivated interference in our health care. We must let our elected officials know we will not stand for repealing fee-for-service legislation before it has a chance to show it can produce the same great results for New York patients. As a bill is already in motion to repeal the critical legislation, the time to speak up is now.

We are all familiar with the saying, “If it’s not broken, don’t fix it.” But whoever heard of: “If it’s broken, fix it, but then immediately break it again”? That’s what we’ll be facing in New York if we don’t raise our voices now and stop greed in its tracks.