In June, the Federal Trade Commission (FTC) announced that it would launch an investigation into the practices of the “prescription drugs” industry. Known as Pharmacy Benefit Managers (PBMs), these intermediaries determine whether an insurer will pay for a prescription prescribed to a patient. Caremark, ExpressScripts, and Optum are some of the well-known gatekeepers and drug providers.
The FTC statement reads: “Pharmacy benefit managers are the middlemen hired to negotiate discounts and reimbursements with drug manufacturers, create drug formulas and associated policies, and reimburse pharmacies for patient prescriptions. The largest pharmacy benefit managers are now vertically integrated with the largest health insurers and wholly owned mail order and specialist pharmacies.”
I want to discuss the role of PPE as they relate to one aspect of every physician’s life: the requirement for physicians to obtain prior authorization (PA) before certain medications can be dispensed by the pharmacy and paid for by insurance . Initially, PAs were only required for expensive brand-name drugs, but now PAs are often required for inexpensive generic drugs. Doctors must justify why a specific drug is needed, and they may have to prove that the patient first tried alternative drugs that either didn’t work or were not tolerated, in a process that turns patients into guinea pigs. Often the patient’s physician does not have the ability to start with the most effective drug with the fewest side effects, and each time a dose is changed, a different PA is required.
What started as a cost containment measure has become an unregulated burden for both patients and their doctors. The pleas for justification can be cumbersome and obscure. They can include filling out forms online, uploading records in specific formats, and long wait times to speak to a reviewer. And the appeals process can be cumbersome and time-consuming, with no guarantee that the medication will be approved or that a doctor in the relevant specialty will be involved in the decision.
I will give an example from my own practice. Recently I submitted a prescription and then got the message to start the pre-authorization process online. There was a list of “acceptable” diagnoses. I checked a box and a new question popped up – asking if I was a certified sleep medicine. I’m a psychiatrist, so the PA was denied. The patient had the option to pay for the medication in cash, without doing or making an appointment with a specialist and waiting for that process.
I looked up the prices in the GoodRx app – a company that negotiates prices outside of insurance and can be used by patients who pay cash. The medication costs just over $288 for a one-month supply at her pharmacy, CVS. Instead, I asked her to go to another pharmacy where the prescription cost $21. This is not uncommon, drug costs can vary hundreds of dollars from one pharmacy to another for no apparent reason.
The time doctors spend on pre-approval (or cost research) is not compensated and is significant. It’s a hoop to jump through, and no one oversees the placement of the hoops. In addition, when patients use their insurance, the copay may be higher than the cash price, and this information is not readily available. Nothing about the process is transparent.
How big is the problem of prior permissions? In December 2021, the American Medical Association conducted a survey of 1,004 practicing physicians. The average physician completes 41 PAs per week, nearly 1 in 5 of written prescriptions. Forty percent of physicians hire staff solely to administer pre-authorizations; 93% of physicians reported that PAs caused delays in receiving care for patients, and 82% reported that PAs caused patients to discontinue treatment. In terms of patient outcomes: 34% of physicians reported a serious adverse event, while 24% had patients requiring hospitalization. Eighty-eight percent of doctors said this process is a high or extremely high burden.
The administrative burden of medicine has wiped out the joy of practicing for so many doctors. Physicians are burned out and are retiring earlier, and patients are frustrated with the high costs and unnecessary complications associated with getting care. The pre-authorization process is a huge contributor to anything that’s wrong with the system. I hope the FTC will take a long hard look at the burden, confusion and cost shift — rather than cut corners — that this taxing process is causing the medical system.
Dina Miller (firstname.lastname@example.org) is a psychiatrist in Baltimore City.