Press Release

RELEASE: ACHP Highlights Innovative, Transparent PBM Models in Response to Administration Rebate Rule

Member plans meet with Congressional leaders to share alternative model that keeps Rx drug costs in check, encourages passage of CREATES Act

Washington (April 8, 2019) – The Alliance of Community Health Plans (ACHP) is offering the Administration an innovative, alternative solution to controlling prescription drug costs for consumers in a response to the HHS proposed ruleRemoval of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals.  The transparent PBM model used by many ACHP member plans is a proven, fully-transparent method that passes savings to consumers.

“We are pleased the Administration is focused on transparency in the drug supply chain, particularly amongst PBMs. But we don’t have to upend the entire system to drive down costs,” said ACHP President and CEO Ceci Connolly. “Several ACHP member plans have fully transparent, fee-based PBM models that pass 100 percent of the rebates they secure back to clients.  There are no hidden fees or black boxes and they keep drug costs in check for consumers.”

These PBM models exist under the current safe harbor framework and have a proven track record on reducing costs. These transparent models eliminate the perverse incentives in traditional PBM models in which drugs with higher list prices receive preferred treatment.  See our infographic here.

The results speak for themselves.  Pharmacy Benefits Dimensions (PBD), the PBM arm of Independent Health, has been able to significantly reduce pharmacy costs for their customers nationwide by up to 30 percent in just one year. In the case of one employer served by PBD, per-employee per-month spending was reduced from $169 to $69, saving that employer over $300,000 in its overall pharmacy costs and employee costs. These savings can be used by health plans in a variety of ways, including to reduce monthly premiums, copays and deductibles.

“Unfortunately, nothing in the proposed rule would reduce list prices,” said Connolly. “We encourage the Administration to consider these innovative, alternative PBMs and pursue policies that encourage fully transparent models that do not operate in the shadows.”

ACHP member health plans were on Capitol Hill today highlighting the transparent PBM model and urging immediate action to reduce drug costs and rein in abusive drug pricing by passing the CREATES Act and other transparency legislation.

ACHP shared additional comments on the HHS proposed rebate rule, including concerns with the rule’s implementation timeline. If implemented, the rule would potentially increase costs for beneficiaries and taxpayers, including higher premiums, and provide a financial windfall for many drug companies. ACHP is also concerned there is nothing in the proposed rule to address the problem of rapid and steep price increases, or the lack of transparency justifying those prices. Indeed, news reports in January detailed nearly 30 pharmaceutical companies intending to raise prices on about 60 therapies in defiance of President Trump’s call for a slowdown.

To access the full text of ACHP’s recommendations, click here.

About ACHP

The Alliance of Community Health Plans (ACHP) is a national leadership organization bringing together innovative health plans and provider groups that are among America’s best at delivering affordable, high-quality coverage and care. ACHP’s member health plans provide coverage and care for more than 21 million Americans across 34 states and the District of Columbia. These organizations focus on improving the health of the communities they serve and are on the leading edge of innovations in affordability and quality of care, including primary care redesign, payment reform, accountable health care delivery and use of information technology. To learn more, go and follow ACHP on Twitter @_ACHP.