The National Community Pharmacists Association said on May 21 that a new report from the Office of Inspector General of the Department of Health and Human Services raises important questions about the impact of vertical integration in Medicare Part D.
The association's response highlights concerns over how vertically integrated health plans may affect drug costs for patients and limit transparency in pharmacy payments. These issues are significant as they could influence affordability and access to care for many Americans who rely on Medicare Part D.
B. Douglas Hoey, CEO of the National Community Pharmacists Association, said, “The OIG’s report reveals several key takeaways, including that patients covered by vertically integrated health plans pay substantially higher drug out of pocket costs. In comments to the Federal Trade Commission, NCPA has highlighted the unholy trinity of health plans, pharmacy benefit manager (PBM) and affiliated pharmacy under one ownership, making health care less affordable due to the conflicts of interest inherent in common ownership.”
Hoey also addressed challenges with data transparency: “Another key takeaway is that vertically integrated health insurance corporations continue to, at best, make it difficult to analyze the full cost impact on purchasers of health care. The OIG highlighted ‘data limitations pertaining to pharmacy payments’ that made the full impacts of vertical integration on pharmacies unknown. What is known is that the vertically integrated health plans/PBMs make it difficult even for the FTC to investigate their impact on consumers and competition. The FTC has indicated that PBM practices remain highly opaque, requiring required multiple rounds of compulsory data requests in their efforts to investigate the impact of PBMs.”
He further noted market concentration: “The OIG study also noted that just six health plans account for over 80 percent of all of the gross Part D spending in 2023. That level of market concentration is consistent with findings from previous reports by the FTC, the House Oversight Committee, and several news investigations, all of which determined that PBMs increase the cost of drugs and limit patient choice.”
Hoey concluded by saying: “We look forward to future OIG findings as they continue this important work, and we look forward to their ongoing efforts to complete the blind spots in the report due to limitations in data provided by the health care conglomerates.”
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