DES MOINES — An otherwise low-key legislative hearing turned red-hot when a pharmacist and a pharmacy benefits manager squared off over the difference between reimbursements to local pharmacies and what public entities are charged for prescription medications.
“How do you justify that?” Rep. John Forbes, D-Des Moines, demanded as he pointed to a chart showing differences ranging from $72 to $146 between what an Ottumwa pharmacy was reimbursed for four popular prescriptions medicines supplied to the Wapello County Jail and what the county was charged by the prescription benefits manager (PBM).
Forbes, a pharmacist who was not a member of the House Government Oversight Committee until Wednesday’s hearing, didn’t believe the claims of Rich Ponesse of CVS Pharmacy that prescription benefits managers benefit taxpayer-funded entities.
“PBMs are an integral part of health care delivery. They save plan sponsors money,” said Ponesse, who has managed prescription benefits for 23 years.
Forbes responded with an expletive, explaining later he normally wouldn’t use that word in legislative discussion, “but my frustration was at a level that I had to get my point across that this is very serious.”
“I wanted to really vent not only my feelings but the feelings of all pharmacists across the state that we are serious about this, and we want to get to the bottom of this,” Forbes said. “I don’t want counties to have to raise taxes to cover prescription drug costs.”
Chairman Bobby Kaufmann, R-Wilton, said that passion is why he added Forbes to the committee.
“When you see the numbers right there in front of you, it has some effect. I think it shocked everybody,” he said.
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Pharmacist Mark Frahm, owner of Southside Drug in Ottumwa, was “irritated” when he discovered that difference in what he was being reimbursed and what the county jail was paying for medications.
“I know what I got paid and I saw what they got paid, and that shouldn’t be,” he said after speaking to the committee. “We try to be fair with everything. We don’t try to gouge anybody. But the PBMs are the opposite. They’re out to make as much money as anybody and the way they do it is not right.”
Ponesse defended CVS and PBMs, which are basically the middle man between insurance companies or “plan sponsors” and pharmacies.
“I am a for-profit company, and I’m not ashamed of that,” he told lawmakers.
Iowa City pharmacist Randy McDonough understood that “there has to be a business side,” but he thinks compassion for patients is being lost.
“I went into health care because I wanted to care for people,” McDonough said, adding that, unlike a PBM, “I see the patients’ eyes ... touch the patients’ hands. I see and experience their concerns.”
CVS Health is the target of a False Claims Act lawsuit that alleges the company, through its PBM, illegally billed Medicare Part D.
The lawsuit, filed by the insurance company Aetna, said CVS Caremark overbilled for as much as $1.5 billion in 2014.
Iowa is not alone is probing the relationships between PBMs and taxpayer-funded entities. Ohio, Arkansas and West Virginia are considering or have adopted regulations based on concerns similar to those presented to the Government Oversight Committee.
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Kaufmann doubts lawmakers will make changes in this session, which already has exceeded its 100-day schedule.
However, he wants to hear from cities, counties and schools that are dealing with PBMs to learn whether they are seeing the same problem as Wapello County.
There’s no reason to think Wapello County’s experience is unique, Wapello County Supervisor Jerry Parker told the committee.
Parker said there’s no reason to think many other Iowa counties, cities and school districts face a similar financial fate.
“The figures don’t lie. We’re losing taxpayer dollars,” Parker said. “If we’re losing, the city’s probably losing and the state’s probably losing, so this committee has a very important job to do. Help us, who can’t necessarily in these positions, help ourselves.”
It’s not the first time the Legislature has addressed the issue.
Committee member Rep. Vicki Lensing, D-Iowa City, was the manager of a PBM bill in 2007. “Obviously, we didn’t go far enough,” she said.
A 2015 law intended to give the state more leverage was overturned by a federal court.
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