Pharmacy Benefit Management System Needs Reform

TMA Testimony of Debra Patt, MD

PBM Reform
In SUPPORT of HB 2231 by Rep. Tom Oliverson
House Insurance Committee

 April 2, 2019

Good morning Mr. Chairman, Dr. Oliverson, and members of the committee. Thank you for allowing me to testify today. My name is Dr. Debra Patt, I am an oncologist from Austin where I practice as a breast cancer specialist and serve as a Vice President for Texas Oncology, the largest independent, multispecialty cancer practice in the state with over 420 physicians. We treat over 60,000 Texans with new cancers annually across the state at over 175 sites of service and are a part of The US Oncology Network. Today I am testifying on behalf of the Texas Medical Association and its nearly 53,000 members statewide in support of HB 2231

First and foremost, thank you Representative Oliverson for filing HB 2231. PBM reform is long overdue and has been a barrier to the care patients deserve. 

As a leader in Texas Oncology, my large statewide practice that treats almost half of Texans with cancer, I would like to highlight the current lack of transparency and accountability in the pharmacy benefit manager (PBM) system and how it is contributing to the rising cost of treatment in community oncology. I speak specifically of PBMs’ use of retroactive pharmacy price concessions, and PBMs’ practice of steering patients to PBM-owned mail order or specialty pharmacies. 

As background, Texas Oncology is the largest independent cancer and hematology practice in the state , providing medical oncology, hematology, radiation oncology, gynecologic oncology, pathology, breast surgery services, and palliative care. 

Over the past decade, the availability and use of oral oncolytic medications as an effective cancer treatment option has significantly increased. In comparison to traditional intravenous (IV) chemotherapy treatment, oral oncolytic drugs present an easier, more convenient route of administration for patients. Oral oncolytic drugs have been shown to be safer and more effective than traditional IV chemotherapy treatments for some cancers. 

These advances have been an important part of changing cancer to a chronic disease for many patients. However, despite the effectiveness of oral oncolytic drugs, close monitoring by the prescribing physician is required, and patient access and adherence has remained a key barrier to positive patient outcomes. 

To improve patient access and adherence, many community-based cancer clinics, like Texas Oncology, have established medically integrated platforms or practice-based pharmacies. Patients who receive medication directly from their treating physician experience timelier care, higher adherence rates, and improved outcomes. This is particularly true in oncology, where complex cancer treatment with serious side effects require unabating skilled physician attention for regular visits and chemotherapy. 

In recent years, pharmacy direct and indirect remuneration (DIR) fees have created significant challenges for pharmacies, making it more difficult for us to provide care to our patients. Pharmacy price concessions or “DIR fees” are “backdoor fees,” chargebacks or other recoupments imposed by PBMs on pharmacy providers after a drug claim is submitted, adjudicated, and even paid out to a pharmacy provider. Pharmacy DIR fees include several types of arrangements such as network access fees, administrative fees, or “pay-to-play” fees between health plans or PBMs and pharmacies. These fees can be so substantial that our pharmacy may lose money dispensing a prescription. We encourage the committee to support this bill as it works towards improving transparency and predictability, so pharmacies can anticipate the net reimbursement for a given prescription and addresses expanding avenues for pharmacies to appeal pharmacy DIR fees. 

In addition, HB 2231 states that a PBM may not require an enrollee to use a mail order pharmacy. We have increasingly seen PBMs directing cancer patients to use a PBM-owned mail order or specialty pharmacy to obtain their oral chemotherapy, which can result in higher costs and less coordinated care. In some cases, patients must bring their medications to their physicians’ office themselves, creating storage and handling concerns. Forcing IOD practices and practice-based pharmacies out-of-network and requiring patients to instead receive oral oncolytic drugs through a PBM-owned mail order pharmacy can result in poorly coordinated care. 

As an example, I treat many patients with metastatic breast cancer. There is an oral drug called palbociclib which can triple progression free survival among my patients in combination with estrogen blocking therapy. Palbociclib is a pill that patients take at home, but it frequently causes a low white blood cell count that can put a patient at risk for a serious infection. Frequently, I have to dose reduce the drug because of this toxicity, more than 50 percent of the time. 

It happens frequently that I see a patient who is taking palbociclib at 125 mg/day. I see them to reinitiate treatment and notice that the white blood cell count is too low to safely reintroduce the treatment. The patient thus requires a dose reduction. Because they were receiving their pills outside of our clinic, they already may have received the 125-mg dose from the mail order pharmacy associated with their PBM. Because they now require a 100 mg dose to safely take the medication, they have to waste this medication. That is more than a $10,000 loss. The patient's insurance company just pays again. Coordination between the doctor and the pharmacy such as in a medically integrated pharmacy becomes very important when using oral therapies that are high cost and have potentially high toxicity.

I would like to praise Dr. Oliverson on his leadership and collaboration with many stakeholders on this important legislation.

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Last Updated On

April 02, 2019

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