Critics of the pharmacy benefit manager (PBM) industry protested Friday outside the Eden Prairie headquarters of Optum, bringing to the company’s campus allegations that business practices by the nation’s largest PBMs are driving up medication costs and forcing independent pharmacies out of business.
Rally outside Optum HQ spotlights debate over pharmacy benefits managers
About 50 people gathered in Eden Prairie to allege biggest players in industry are ballooning drug costs while running independent pharmacies out of business, a claim that Optum denies.
The Minnesota Star Tribune
September 13, 2024 at 7:30PM
As a result, patients have fewer choices and more trouble paying for the drugs they need, said pharmacist John Hoeschen, owner of St. Paul Corner Drug.
“People go without services they need, for their greed,” Hoeschen said at a rally across the street from Optum’s headquarters with about 50 attendees.
Optum is the health services division of Minnetonka-based UnitedHealth Group, which also owns the giant health insurer UnitedHealthcare. The company’s OptumRx division is one of the nation’s three largest pharmacy benefit managers that negotiate drug prices with manufacturers and structure medication benefits within health plans.
In a statement, OptumRx said it has been working to ensure pharmacies are paid fairly while offering to help them operate more efficiently. The company said it’s partnering with pharmacists to provide reimbursement for all the services they provide, including managing patient medications and connecting people with help for basic needs such as food, nutrition and transportation.
Scrutiny of the pharmacy benefit manager industry has grown in recent years.
An ongoing Federal Trade Commission study published in July found evidence to suggest PBMs may have inflated drug costs and squeezed independent pharmacies while enriching some of the largest companies in the country.
In June, Minnesota Attorney General Keith Ellison led a bipartisan group of 32 attorneys general asking the U.S. Supreme Court to review a case that otherwise threatens relatively new state regulation of pharmacy benefit managers. Last year, two large public sector employer groups in Minnesota followed the example of a few other states in trying reverse auction technology to address what some see as competition and transparency flaws in awarding PBM contracts.
The Pharmaceutical Care Management Association -- the trade group for PBMs -- has pushed back on all fronts, arguing pharmacy benefit managers have a track record of delivering savings in a competitive market where new regulations threaten to add costs and some critics have ties to pharmaceutical manufacturers.
On Friday, OptumRx pointed to data from the trade group showing the number of independent U.S. pharmacies has increased by 5.8% from 2014 to 2024.
But state Sen. Glenn Gruenhagen, R-Glencoe, said during the rally that the number of independent pharmacies in Minnesota has dropped from 550 in 1996 to just 156 last year. Gruenhagen said his district west of the Twin Cities lost three independent pharmacies in the past few years.
“It’s not just. They’re social-engineering you out of business,” Gruenhagen said. “PBMs ... don’t manufacture or deliver the health care, they simply manipulate the profits.”
The event, which drew participants from Minnesota and other states, was organized by three advocacy groups, including Arizona-based Pharmacists United for Truth & Transparency. Before the rally, protesters marched on sidewalks at the perimeter of Optum’s campus, among them Deborah Keaveny, an independent pharmacist in Winsted.
Part of the concern with PBMs, Keaveny said, is they set copays and dispensing rules in ways that effectively steer patients and their prescriptions away from independents and toward their own mail-order and specialty pharmacies. In addition, she said PBM reimbursements are below pharmacies’ costs.
“Many of our brand name prescriptions, we’re actually losing money when we dispense them,” Keaveny said. “Independent pharmacies are closing every day, because of the practices of pharmacy benefit managers.”
Just as OptumRx is part of UnitedHealth Group, the other two big PBMs in the United States — Caremark and Express Scripts — are part of giant health care corporations, Rhode Island-based CVS Health and Connecticut-based Cigna.
The massive size of these companies, Hoeschen said, is part of the problem.
“This is an unnecessary layer in the middle that’s just sucking money out of our health care system and absolutely destroying access to care,” he said in an interview.
Earler this year, UnitedHealth Group’s chief executive was questioned in Congress about whether the company has grown too big at a hearing where Sen. Elizabeth Warren, D-Mass., called it a “monopoly on steroids.”
CEO Andrew Witty responded by saying that, despite its size, UnitedHealth Group owns no hospitals, does not manufacture drugs and and has only an affiliation arrangement — not outright ownership — with most of Optum’s medical group partners.
The hearing focused on a cyberattack on a UnitedHealth Group subsidiary called Change Healthcare that caused chaos for many hospitals and medical firms in getting paid for services. Company officials have suggested that its size helped United better respond to fallout from the hack, which forced the shutdown of a widely used health care data clearinghouse.
In its statement Friday, OptumRx said the company is “removing retroactive recoupment (clawbacks) for pharmacies” and “offering predictive analytics and reconciliation tools to further reduce administrative burden and allow more time to focus on patient care.”
“Frontline pharmacy workers play a vital role in supporting people’s health,” the company said.
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