Editor’s Note: This article is an opinion piece shared with Patient Worthy from our partner network. Opinion pieces may not reflect the views of Patient Worthy, its employees, or any of its affiliates.
The Role of Pharmacy Benefit Managers (PBMs) in Biosimilar Adoption
Biosimilars, designed as cost-effective alternatives to existing biologic drugs, promise substantial savings for both healthcare systems and patients. However, the adoption of biosimilars has been stymied by several factors, including PBMs, which operate as middlemen in the pharmaceutical supply chain. PBMs, which control a significant portion of the prescription drug market, influence drug formularies and the financial incentives tied to them. They often implement restrictive formulary policies that favor original biologics over biosimilars, driven by complex rebate structures and financial arrangements with pharmaceutical companies. These restrictions mean patients lose out on access to drug therapies while PBMs profit in secret.
Importantly, these policies place physicians in an ethical dilemma. While their primary obligation is to provide the best and most cost-effective care for their patients, the economic pressures exerted by PBMs can lead to compromised decision-making. For example, in a “buy and bill” reimbursement model, physicians might incur financial losses by prescribing biosimilars over original biologics due to lower reimbursement rates, despite the potential benefits to patients.
The Most Favored Nation Policy and Its Unintended Consequences
Introduced by the Trump Administration, the Most Favored Nation policy aimed to reduce the cost of prescription drugs by aligning U.S. prices with those in other countries. However, the policy’s implementation details revealed that the so-called “savings” would likely come at the expense of community physicians and pharmacists, further straining their financial viability.
Under MFN, drastic reduction in reimbursement rates could force providers to rely more heavily on alternative therapies, which might not be as safe or effective, and could result in delayed or cancelled treatments for patients. This shift not only impacts patient care but also increases costs for community-based healthcare providers, while PBMs and insurers stand to benefit from the policy.
The Interconnected Impact on Healthcare Delivery
The practices of PBMs and the implications of the MFN policy are deeply interconnected, exacerbating the challenges faced by healthcare providers and patients. PBMs, controlling nearly 70% of the prescription drug market with significant revenues, continue to drive up drug costs, which are then disproportionately borne by patients and community healthcare providers.
The ethical obligation of physicians to advocate for patient welfare is challenged by a system that prioritizes financial gains over equitable access to care. This situation underscores the need for systemic reforms to close regulatory loopholes that allow PBMs to manipulate drug costs and to create a more sustainable healthcare environment.
The Need for Reform and Advocacy
To address these issues, patients and physicians must engage in advocacy efforts that push for reforms aligning financial incentives with the provision of high-quality, affordable care. This includes challenging restrictive PBM policies, advocating for transparent and fair reimbursement models, and supporting legislative action to close regulatory gaps.
Furthermore, the focus must be on redirecting resources to communities burdened by high out-of-pocket costs, ensuring that the healthcare system truly serves those it was intended to help. The conversation around healthcare reform must move beyond headline-grabbing policies and focus on creating a sustainable model that prioritizes patient outcomes over profits for intermediaries.
The influence of PBMs and the unintended consequences of the MFN policy highlight the urgent need for systemic changes in the U.S. healthcare system. Congress: It’s time to address the root causes of high drug costs and advocate for equitable access to biosimilars and other essential treatments. Together, we can move towards a more just and effective healthcare landscape.
Karen Ferguson, MS, Founder, Our Stories Rx
