By Dr. José Arévalo
30 Oct 2023, 00:59 AM EDT
California is one of the richest states in the country. Despite this, we have failed to provide access to medical care to a good part of the population. The Latino community is often forced to delay essential medical treatment, despite being identified as a group with the highest rate of chronic diseases, due to high healthcare costs.
One of the main reasons for this increase in costs is middlemen, often called pharmacy benefit managers (PBMs). These unscrupulous companies pocket discounts on treatments that should be passed on to patients.
The practice has caught the attention of Congress. Sen. Tom Carper (D-Del.) and Chuck Grassley (R-Iowa) earlier this year introduced the Pharmacy Benefit Manager Transparency Act that would authorize the Centers for Medicare & Medicaid Services (CMS) to oversee the ways in which PBMs determine which drugs are included in the list of covered drugs.
Prescription benefit managers (PBMs) are middlemen between insurance companies and pharmaceutical manufacturers. While these companies receive significant discounts on medications, they often pocket the difference rather than share it with consumers.
According to recent studies, 38.2% of the Latino community in California delays care due to cost or lack of insurance. This gap is the highest percentage compared to other ethnic groups.
Latino residents living with diabetes are the most affected by this lack of care. Insulin has been identified as the medication with the highest reimbursement rate: 73 percent. This reimbursement would be a significant cost savings for patients, but many cannot access it.
The best way to improve access is to share manufacturers’ rebates with patients who need the drugs. According to GlobalData, sharing reimbursements directly with patients could reduce total healthcare costs by $1,000 per person per year or $8 billion over 10 years. These savings would also reduce patient spending by $1.5 billion over 10 years and prevent 700 deaths per year.
Sharing manufacturer rebates directly with patients would result in an overall average improvement of 9% in treatment adherence. Sixteen percent of Latinos could access essential care.
As a physician and researcher, I have witnessed the debilitating consequences of chronic diseases that affect my community. For example, type 2 diabetes affects more than 50 percent of Latinos. The disease increases the chances of suffering more chronic diseases such as kidney failure, vision loss and blindness.
To address these issues, I founded the California Diabetes Coalition. I also led an effort to establish and promulgate consensus guidelines for basic diabetes care through CCHRI that are now widely accepted throughout California.
While the cost of insulin is increasing, this is not the only medication whose cost has increased. Insulin is just one example of the growing number of treatments that PBMs are identifying to increase their share of profits. A recent CHBRP analysis found that patients would save approximately $70.8 million at the pharmacy counter if PBMs shared 90 percent of discounts and rebates.
The Pharmacy Benefit Manager Oversight Act is bipartisan legislation that would also bring together essential federal agencies to ensure oversight and transparency and, most importantly, ease the cost burden on patients struggling to pay for their needs.
Dr. José Arévalo is board president and executive committee member of Latinx Physicians of California (LPOC).