The Need to Reform the PBM "Middleman" Industry
As a pharmacist in East Tennessee for 30+ years, it’s personal for me that Congress act — and act soon — to lower the costs of prescription drugs. There’s no doubt we have to reform the ways PhRMA companies price prescription medicines and sometimes manipulate the system.
But equally important is the need to reform the practices and roles of Pharmacy Benefit Managers (PBMs) — shadowy middlemen whose lack of transparency, unjustifiable fees, and massive market consolidations have made them among the most profitable centers of our healthcare system that most folks have never heard of.
PBMs serve as intermediaries between health plans, pharmaceutical manufacturers and pharmacies, and PBMs establish networks for consumers to receive reimbursement for drugs. Although the primary function of a PBM initially was simply to create networks and process pharmaceutical claims, these entities have become one of the most profitable, problematic, least regulated and least understood aspects of our healthcare delivery system.
Just three PBMs control 80% of the prescription drug market, and last year, they denied coverage to more than 1,150 medicines. They’ve exploited a lack of transparency and created conflicts of interest that have significantly distorted competition, reduced choices for consumers and ultimately increased the cost of drugs.
This has gained the attention of states, Congress, and the Federal Trade Commission (FTC).
I have been active on a number of fronts to bring greater transparency to the PBM industry, to end PBM anti-competitive practices, and to ensure the administration of prescription benefits Americans need to get and stay healthy is done in simpler and more cost-efficient ways.
- In April 2023, I introduced the PBM Sunshine and Accountability Act (H.R. 2816), which would establish new, public reporting requirements for PBMs, to ensure that patients, providers, and employers are able to make informed, cost-efficient, and value-based PBM choices.
- In July 2023, I introduced the Patient Right to Shop Act (H.R. 4712), to prohibit “gag clauses” in PBM contracts to ensure patients can access pricing tools to compare prices before paying for a prescription.
- In order to put a stop to PBM predatory pricing tactics for Medicaid reimbursements, I cosponsored the Drug Price Transparency in Medicaid Act (H.R. 1613). This bill would end PBM spread pricing in Medicaid programs, which leads to low reimbursement rates for pharmacies and artificially raises health care costs.
- To protect patients from high out-of-pocket costs, I cosponsored the Fairness for Patient Medications Act (H.R. 3285), a bill to make sure that for certain “highly rebated” drugs, no patient pays more in cost sharing than their insurer or health plan paid for the drug.
- In a May, 2022 letter to the Federal Trade Commission (FTC), I called for an investigation into PBMs’ predatory practices, which lead to higher prices on prescription medications for patients.