Big health insurers are using Washington-based trade group the Pharmaceutical Care Management Association (PCMA) to bankroll ad campaigns in the DC area

Health insurers are using the PCMA to protect their expanding profits in the pharmacy supply chain.

I wrote a few days ago that CVS/Aetna’s chief financial officer told wealthy investors not to fret about the growing momentum in Congress to crack down on profiteering by pharmacy benefit management (PBM) companies, one of the largest of which is owned by CVS. 

His message to shareholders: We’ve got your back. 

The CFO’s comments undoubtedly reassured investors that insurer/PBM companies consider profit margins sacred. So even if Congress passes bills to make some revenue-generating PBM practices unlawful, insurers and their PBMs will make up for any loss of profits by making their employer and government customers – and ultimately patients and taxpayers – pay more in one way or another (e.g., higher premiums and out-of-pocket requirements).

I’m sure they’re confident they can pull that off because CVS/Aetna and two other big insurers – Cigna and UnitedHealth – now own the country’s three biggest PBMs. Collectively they control 80% of the multi-billion-dollar drug middleman market in the United States. Many employers undoubtedly would believe they have no alternative but to deal with one of the big guys, even though that’s far from true (as I’ll write in the coming weeks). 

Being a drug middleman is so lucrative that the big insurers’ PBMs now produce more revenue and profits for their owners than their health insurance businesses. CVS’s PBM, Caremark, brings in more money for the parent company and its shareholders than either Aetna’s health plans or the company’s 10,000 retail stores, which, of course, also have their own pharmacies. 

But the insurers certainly don’t want lawmakers to disrupt their business models in any way, so they’re spending massively on a laser-focused propaganda and lobbying campaign aimed at members of Congress and the Biden administration. 

If you live in Washington, D.C., you can’t turn on your TV without seeing an insurance industry-funded ad extolling the supposed virtues of PBMs. But you would have no idea the insurance industry is bankrolling the ad campaign unless you knew that the entity named as the ads’ sponsor – the Pharmaceutical Care Management Association – gets most of its funding from the likes of CVS, Cigna (where I served as VP of corporate communications) and UnitedHealth. 

A new outfit to influence Congress and protect industry profits

When it comes to assigning blame for rising health-care costs, my former colleagues in the insurance business have for years now been using three big PR and lobbying outfits – America’s Health Insurance Plans (AHIP), the BlueCross BlueShield Association (BCBSA), and the Better Medicare Alliance (BMA) – to carry out their campaigns of misdirection and finger-pointing to keep meddling lawmakers at bay. 

Now that the biggest insurers have also become middlemen in the drug supply chain, largely through giant-sized acquisitions, they now control and fund a fourth Washington-based group – PCMA – to protect their expanding profits.

Insurers have long been involved in efforts to divert attention from themselves by casting drug makers as villains. Their spending on self-serving everybody-but-us lobbying and PR campaigns has helped keep Big Pharma in the Congressional hot seat for the past several years. 

But now that several news organizations and government watchdog groups have begun raising the alarm about insurers’ newest cash cow, PBMs and their owners are finding themselves in the hot seat for the first time in a long time. Responding to the heat, PCMA recently launched what it says is a seven-figure advertising campaign to “educate policymakers and the public” about the value of PBMs and, most importantly, to get lawmakers to support “proactive policy solutions” health insurers favor. 

What insurance industry propaganda now looks and sounds like

See below for one of the PCMA ads running in the D.C. area during televised sporting events and other popular shows:

“Commitment”

Transcript:

On behalf of the 275 million Americans we serve, pharmacy benefit companies are working every day to secure savings for employers, taxpayers, and patients.

By pushing big drug companies for price concessions we save employers and patients more than $1,000 per person each year.

Now we’re building on that commitment, calling on Congress to end patent abuse and support greater competition to lower drug prices. America’s pharmacy benefit management companies: partners for an affordable health care future.

What these companies want you and the people you vote for to believe is that they are the good guys in white hats who make sure you get the medications you need at a price you can afford. What they don’t tell you is that they (not your doctor) decide which drugs you’ll have access to, that they reject tens of thousands of prescriptions every day, and determine how much you’ll have to pay out of your own pocket before they’ll pay a dime. (They also don’t tell you that that $1,000 per person stat is one they came up with through “research” funded by the industry.)

While the industry’s ads blanket the airways in D.C., the industry’s lobbyists have once again become frequent visitors to congressional offices. Take it from me, many of them have excellent relationships with both Democrats and Republicans, and they are skilled (and highly paid) propagandists.

But so far, a growing and surprisingly bipartisan group of lawmakers on both sides of Capitol Hill are getting behind a flurry of bills to reform PBMs in various ways. And they’re getting bolder in their public statements. Here’s what Senate Finance Committee Chair Ron Wyden (D-Oregon) had to say about PBMs recently:

For years, drug pricing middlemen like pharmacy benefit managers have been engaging in practices that are driving up the cost of prescription drugs and clobbering American families at the pharmacy counter. 

And here’s what Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) added: 

Some of the most life-saving medications remain out of reach for far too many working families and seniors.

Last week, a host of senators on both sides of the political aisle – including some of the most conservative, moderate, and liberal lawmakers in Congress – piled on and signed on as co-sponsors of a major PBM reform bill. Over on the House side, several bills – also with Democratic and Republican co-sponsors – are working their way through various committees. 

A final point I want you to keep in mind: The industry’s current “seven-figure” advertising campaign is not really being financed by insurance companies or their highly paid executives. YOU are paying for it. That’s because insurers set aside a sizable chunk of what you pay in your taxes and monthly premiums to cover the cost of their campaigns to keep their profits high and your bank balances low.