Scott: Companies should lower weight-loss drug $$

Last month, three leading pharmacy benefit companies pledged to Sen. Bernie Sanders, the chairman of the Senate Committee on Health, Education, Labor and Pensions —  ahead of a recent congressional hearing where major drug manufacturer Novo Nordisk testified on how the company chooses to price popular GLP-1 drugs — that they are committed to facilitating access to these drugs, should Novo Nordisk (and other GLP-1 drug manufacturers) decide to lower the price of certain GLP-1s to $100 or less per patient per month for health plan sponsors.

Pharmacy Benefit Managers are already working to negotiate lower costs for GLP-1s. Still, more meaningful progress for all patients cannot happen without drug companies first lowering their list prices.

Once a drug company sets a list price, PBMs negotiate with the drug company to get the net cost — the amount employers and plan sponsors pay for prescription drugs that they cover for the people on their health plans — as low as possible. Meanwhile, the drug companies’ list price decisions are based on their profit incentives, spending needs, and other factors under their control.

Big drug companies must put patients over profits and substantially lower the price as a starting point for negotiations with PBMs to ensure access and affordability for health plan sponsors and the individuals and families who rely on them for health insurance. In other words, if a drug company doesn’t also address the drug’s net price, there will be little progress.

This latest exchange is a clear example of how drug companies use PBMs as their scapegoat for why they “can’t” lower the list prices of prescription drugs. This is factually inaccurate. Countless analyses, including analysis using Centers for Medicare and Medicaid Services data of the top 250 brand-name drugs in Medicare Part D, confirm that price increases from big drug companies are unrelated to PBM negotiations.

By deflecting from their anti-competitive practices, like misusing the patent system to keep more affordable alternatives from coming to market, drug companies can charge whatever price they want on their products. When one drug manufacturer lowers its prices, it must still compete with other GLP-1 manufacturers for formulary placements — competition is a good thing and applies downward pressure on drug companies to lower their prices.

Meanwhile, PBMs are using their specialized pharmacy benefit expertise to actively support employers that cover GLP-1s for people seeking to lose weight. While the coverage decision belongs to the employer and plan sponsor, PBMs of all shapes and sizes (and there are 70 PBMs competing for employers’ business in this country) are offering them comprehensive programs to help the right patients gain access to these treatments, combined with services that will help maximize the chances of long-term treatment success.

Bottom line: To deliver lower prescription drug costs for patients, drug companies need to do their part and lower the list prices of the drugs they make.

JC Scott is the president and CEO of the Pharmaceutical Care Management Association/InsideSources