Another Year, Another Misleading Insurance Company Report

Another Year, Another Misleading Insurance Company Report

Once again, Blue Cross Blue Shield is out with a report attempting to stoke fear and confusion about prescription drug costs. And once again (because we’ve chronicled it before) what the major insurance company has to say is contradicted by its own pharmacy benefits manager.

These drug cost middlemen, also known as PBMs, manage prescription drug benefits on behalf of health plans. It just so happens that Blue Cross Blue Shield plans own one of the largest PBMs in the country – Prime Therapeutics. One should expect that the report released by Blue Cross Blue Shield would be reflected in the data put forward by its own PBM. But it’s not.

Here is what Prime Therapeutics has said this year about the trend of prescription drug costs:

  • In February, Prime announced “the second consecutive year of outstanding trend results.” What made them so outstanding? Prime’s “numerous management tools” led to a 0.2 percent drop in the drug trend for commercial health plans.
  • Prime also noted a drop a -0.8 percent and -5.4 percent drop for Medicare and Medicaid, respectively.
  • Prime’s chief clinical officer said they were “thrilled drug expenditures for our clients declined in 2017.”

It’s always important to note that what PBMs report reflects what health plans are actually paying. The same can’t be said for the Blue Cross Blue Shield report. As even they have to admit – in a note buried on page 11 of its report – the prices they point to “do not include the impact of drug rebates.” That’s unfortunate because the impact is significant. Drugmakers negotiate rebates to help lower costs and expand access. In 2017, these rebates totaled more than $150 billion. Is there any wonder why Blue Cross Blue Shield failed to include them?

As Dr. Adam Fein – one of the nation’s top experts on pharmaceutical economics – has noted before:

“Clearly, drug spending is not spinning out of control. Pharmacy benefit costs are growing much more slowly than is growth in other part of the U.S. healthcare system, such as hospital spending and physician salaries.”

That’s the reality reflected in most of the data put out by a wide range of health care stakeholders. Of course, that’s never the reality insurance companies want the public to see. Prime’s President’s and CEO Jim DuCharme noted earlier this year:

“Our close alignment with 22 Blue plan clients – 18 of whom are owners – allows us to see the complete pharmacy and medical drug picture to help us drive total cost of care outcomes.”

Such a close alignment should ensure both Blue Cross Blue Shield and its PBM are singing from the same song sheet when it comes to the facts about prescription drug costs. But apparently not.

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