The 118th Congress is off to a great start in shining a light on the harmful practices of pharmacy benefit managers (PBMs) and the insurers that own them. A number of committee hearings over the past few months have made clear how American patients are footing the bill for these corporate interests.
However, it’s time to take things a step further with concrete legislative action to prevent these middlemen from manipulating our healthcare system and patients’ access to low-cost drugs any further.
The vertically integrated PBM mafia is well positioned to shift profits toward themselves in the healthcare supply chain by employing anti-consumer and anti-patient practices. Instead of decreasing drug prices, PBMs shift the blame for rising healthcare costs to everyone else in the supply chain. The three largest PBMs — CVS Caremark, Express Scripts and OptumRx — control nearly 80 percent of the prescription drug market, and are owned by CVS, Cigna and UnitedHealth, respectively. These behemoths take advantage of their position as healthcare intermediaries and use their power to negotiate colossal rebate savings from drug manufacturers.
In addition, PBMs actively promote higher-cost drugs on patients simply because they can negotiate higher rebates from these pricier options. As a result, patients lose access to more affordable alternatives because the middlemen lack the incentives to promote them. These coercive tactics allow PBMs to stack profits off the backs of consumers.
Congress’s recent activity has been effective at exposing these drug middlemen and the need for drastic reform. Over the last few months, multiple committees, such as the Senate Health Education Labor and Pensions, Senate Finance, House Energy and Commerce, and House Oversight and Accountability Committees, all held hearings to discuss PBM’s operations. During a House Oversight and Accountability hearing, Chairman James Comer, R-Kentucky, argued, “From what we have seen, many PBMs are acting without consequence to the detriment of patients and their pocketbooks, because PBMs have been allowed to hide in the shadows. It’s time to bring them into the light.”
The House Oversight Committee even launched an investigation earlier this year to provide the public with evidence of Comer’s statement. For example, the committee requested vital documents and information surrounding the three largest PBMs’ pricing practices. Clearly, this investigation is doing what should have been done long ago to uncover PBMs’ role in rising healthcare costs.
While the recent efforts to turn up the pressure on PBMs and insurers are a good start, much more still needs to be done. Today, PBMs collect almost $200 billion in rebates annually, which could instead go into the pockets of consumers. It’s crucial that any final legislation enforce initiatives to effectively reign in PBMs. This could include provisions aimed at detangling PBM profits from drug prices, having cost savings pass down to patients, and ensuring greater pharmacy choice and access for seniors.
Additionally, Congress should keep its focus on the greedy middlemen that drive up costs and ignore any attempts to shift the narrative in favor of socialist price controls. Advocating for increased drug price controls would directly harm patients and is a politically motivated stunt. Responsible lawmakers must not cave to radical efforts to ram through an agenda of socialized medicine.
As committees continue to deliberate legislation and oversight efforts, it is crucial that the proposed solutions prioritize accountability and transparency in our healthcare system. Until PBMs incorporate substantial transparency measures into their practices, American consumers will remain vulnerable to exploitation. It’s time for Congress to enact policies that would deliver change for patients.
