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Another Voice: Pharmacy benefit managers keep prices in check

Another Voice: Pharmacy benefit managers keep prices in check

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By Lauren Rowley

The Covid-19 pandemic has left tens of millions of Americans without employment. For many, a job loss is exacerbated by the loss of employer-sponsored health insurance. In New York State, more than 261,000 people enrolled in the state’s Medicaid program between February and May, according to the New York State Department of Health.

About 48 million non-elderly Americans will be part of a household in which someone loses a job due to Covid-19, and more than 10 million people are estimated to lose employer-sponsored health insurance as a result of a pandemic-related job loss between April and December 2020, according to findings from the Urban Institute and Robert Wood Johnson Foundation.

For these newly unemployed Americans without health care coverage, Medicaid is a crucial safety net program. Now more than ever, Medicaid must be both fiscally sustainable and available to states’ low-income residents who rely on it for health care coverage.

With prescription drug coverage optional for the states, an influx in enrollment will strain state budgets – leading states to consider how best to fund Medicaid pharmacy benefits to maintain affordable medication access. That’s why it’s important for leaders in Albany to reject legislative proposals or agendas that result in higher prescription drug costs, reduced access and services by increasing reimbursements for pharmacies.

Given this growing challenge, pharmacy benefit managers (PBMs) have never been more essential. For both public programs and private insurance, PBMs are actively engaged in keeping prescription drug costs down and making medications more affordable for individual patients.

PBMs manage prescription drug benefits for hundreds of millions of Americans, including those enrolled in Medicaid. In 2019, state Medicaid programs served a total of 58 million people. Based on that enrollment alone, over the next 10 years, PBMs will save $46 billion for Medicaid programs nationwide, and over $6 billion in New York over 10 years. These savings are critical when you consider the state is facing a $30 billion deficit over the next two years.

While all states provide prescription drug benefits to their Medicaid beneficiaries, they choose how to structure pharmacy benefits. Whether a state decides to use a fee-for-service or managed care model in their Medicaid program, PBMs can lower their prescription drug costs.

Helping fortify Medicaid budgets is important to getting Americans to the other side of this public health crisis.

Lauren Rowley is senior vice president of state affairs, Pharmaceutical Care Management Association.

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