AARP is reportedly opposing a proposal by the Trump administration that could help seniors better afford their prescription drugs.
Practicing Physicians of America co-founder Dr. Marion Mass told The Daily Caller that AARP has aligned itself with “being for kickbacks that are costing the American patient money at the pharmacy counter.”
Critics of the current drug payment system in the U.S. say that middlemen, called pharmacy benefit managers (PBMs), are adding significant cost to drug prices. AARP is closely tied in to one of those PBMs and, according to Mass, that is why the non-profit group that boasts 38 million members and says its mission is to “empower people to choose how they live as they age” is fighting the plan that would help seniors.
Drug manufacturers pay rebates to PBMs, Medicare Part D plans, and Medicaid managed-care organizations to get their pharmaceuticals on health plans’ formularies–lists of drugs that payors cover. Health and Human Services (HHS) Secretary Alex Azar rightfully calls them “kickbacks.”
The proposed rule would end an exception currently in place that protects PBMs from certain parts of the Anti-Kickback Statute being enforced against them. The rule would still permit rebates “for prescription drug discounts offered directly to patients, as well as fixed fee service arrangements between drug manufacturers and PBMs,” according to a January Health and Human Services news release.
AARP believes drug manufacturers, not PBMs, are to blame for high drug costs, a spokesman for the organization told The Daily Caller. “We strongly agree with President Trump on the need to address soaring drug prices, but on the rebate rule, (the Congressional Budget Office) has said it would raise all seniors’ Part D premiums, cost Medicare nearly $200 billion, and have little impact on drug prices.”
Mass countered that AARP’s stance is tied directly to its partnership with UnitedHealth Group (UHG), which runs PBM Optum Rx. “AARP, in your relationship with mega PBM Optum, you’ve defined yourself as being for kickbacks that are costing the American patient money at the pharmacy counter and in hospitals, Mass charged. “You don’t stand for America, you stand for yourselves.”
According to AARP’s financial statement, in 2017, the group derived $627 million in royalties from UHG, well over twice the amount it collected in membership dues.
“The two of those together are an absolute powerhouse in the Medicare industry. We believe that it’s almost criminal what the two companies do. They coordinate to make additional profits when AARP plays itself out to be an organization to benefit and help seniors save money, so it’s a big farce,” said Paul Cornell, CEO of AARP competitor American Seniors Association, in a phone interview with The Daily Caller News Foundation.
The new HHS rule does not go far enough, according to Mass. “No manufacturing, no development, no distribution even,” she said. “(The PBMs and group purchasing organizations) just simply decide who’s going on the formularies and what products are used in hospitals and nursing homes. Why should anyone have legalized kickbacks? There’s three giant PBMs, there’s four giant group purchasing organizations, and these companies are pretty much running the American pharmaceutical supply.”
AARP has been a controversial group for decades, with many claiming that it has no business being a non-profit. In the 1990s, the U.S. Senate investigated AARP’s non-profit status, but uncovered insufficient evidence to strip the group of that status. Just a few years ago, in an interview with the Des Moines Register, former Senator Alan Simpson indicated that he was still “troubled by AARP’s practices.” He called AARP “the biggest marketing operation in America and money-maker” and an organization with market practices that are “the greatest abuse of American generosity I witnessed in my time in the U.S. Senate.”
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