Sunshine laws for physicians proposed... but what about Pharmacy Benefit Managers (PBMs)?

An article posted recently on the medical news site amednews.com highlights new regulations being considered by the Centers for Medicare & Medicaid Services (CMS) that would require pharmaceutical companies to disclose any financial ties to physicians.  Commonly known as sunshine laws, these regulations are meant to promote transparency and limit the influence of the pharmaceutical industry on clinical practice.  Many academic medical centers have already enacted strict rules on these relationships, some even going as far as having "zero tolerance" policies.

What I find strangely missing from these regulations, however, are rules requiring pharmaceutical companies to reveal their financial dealings with pharmacy benefit managers (PBMs), the third party intermediaries responsible for negotiating drug prices on behalf of health insurance beneficiaries.  Examples include CVS Caremark, Medco, and Express Scripts -- companies that, despite the impending financial crisis facing US health care, consistently rank among the country's most profitable enterprises (all three are ranked among the top 100).  The financial relationships between these companies and the pharmaceutical industry have been the subject of growing public scrutiny, and rightly so.  While PBMs purport to pass the savings earned from the deals they negotiate with pharmaceutical companies on to beneficiaries, there have been numerous instances where these savings have only increased profit margins for the PBMs themselves.

For an example of how these relationships can impact patients and the overall health care system, one only has to look back a month at the controversies that emerged out of the patent expiration for Lipitor^® (atorvastatin), the best-selling drug of all time. Ever since its patent expired in November, Pfizer has gone to unprecedented lengths to protect its market share.  As detailed in this article from the New York Times, some of the arrangements Pfizer has negotiated with PBMs include:

• Requiring community pharmacies to reject prescriptions for generic forms of atorvastatin and only dispensing brand-name  Lipitor^®
• Reducing the insurance copay for brand-name Lipitor^® to $4 in an effort to undercut the anticipated $10 or so its generic rivals would cost patients
• Requiring that PBM mail order services dispense only brand-name  Lipitor^®

As one might expect, these tactics have raised a lot of eyebrows, including those of Senators Baucus (D-MT), Grassley (R-IA), and Kohl (D-WI), who recently submitted letters to Pfizer and five of the country's largest PBMs asking them to reveal the details of these financial relationships.  The PBMs implicated in the letter have assured legislators that they would not reap the benefits of these negotiations at the expense of patients, their employers, or CMS.

The part I find most unfortunate about this entire ordeal is that it took the media breaking the story as well as several high-profile legislators asking questions before these financial dealings were made public.  No matter how you feel about the Affordable Care Act or health care reform in general, I think we can all agree that there is little to be lost from increased transparency within the health care system.  If CMS is proposing sunshine laws as a strategy for accomplishing this, PBMs should be held to the same standards as individual physicians and the pharmaceutical industry.

After all, if there's truly nothing to hide, what would a little sunshine hurt anyway?