Health Policy Check Up News

State and Pharmacy Associations Can Demand Greater Conditions of Approval from Agencies that Oversee PBM and Insurer Mergers

Various state and federal agencies approve the mergers of Pharmacy Benefit Managers (PBMs) and Insurers and often “condition” approval on various “consents” by the merging entities. The last few years have witnessed rapid consolidation throughout the healthcare industry, especially within the insurer-PBM realm. Lately, the industry is monitoring events around the latest mergers such as CVS-Aetna and Express Scripts-Cigna. A recent example of successful efforts to condition approval of a merger on increased market fairness recently occurred in Georgia.

Such conditions are necessary to preserve competition and patient choice. If such mergers continue, states will witness decreased market competition for prescription drugs, PBMs charging greater “spread pricing” and exacting larger rebates from manufacturers for Medicare Part D. Additionally, more PBM mergers will substantially magnify the PBM-business-model’s negative impact on an already broken healthcare system, causing the government’s already untenable drug spend to exponentially increase, and patients to pay artificially inflated copayments.

When it comes to approval of PBM mergers, Georgia recently demonstrated that states can take a stand for their patients and providers. Georgia approved the CVS/Aetna merger on the condition that:

     ●  CVS/Aetna must invite non-CVS health care providers (pharmacies, physicians, clinics, etc.) to join its
          networks, and must set the same criteria for all those providers.
     ●  CVS/Aetna must allow Georgia patients to use any health care provider – in or out of network – if that provider
          accepts the same conditions as those within the network.
     ●  CVS/Aetna cannot require patients to use CVS-owned pharmacies, period – not for regular prescriptions,
          refills, or specialty drugs. These concessions reduce the chance that a combined CVS/Aetna can limit patients’
          choice of health care providers. CVS Health already requires patients on some plans to get their specialty
          medications from CVS pharmacies. This practice will no longer be allowed in Georgia.
     ●  CVS/Aetna must disclose the amount of rebates it receives from drug makers and how much of those it passed
          on to insurers.

So how can you achieve similar results in your state? Frier Levitt Government Affairs, LLC (FLGA) can use its network of contacts nationwide to help state agencies, pharmacy associations and individual pharmacies realize that you too can make demands like Georgia, New York and California. Success requires a deep knowledge of the Life Sciences business and legal dynamics. FLGA can help your state pharmacy association exact greater concession from PBMs looking to do business in your state. Contact FLGA today to get started.