On Wednesday, U.S. senators and representatives took a significant step toward reforming the healthcare landscape by introducing a groundbreaking piece of legislation aimed at addressing the conflicts of interest surrounding pharmacy benefit managers (PBMs) and pharmacies. This initiative seeks to eliminate the combined ownership of PBMs and pharmacies, thereby fostering a more competitive environment that prioritizes patient care over corporate profits. The proposed law, known as the Patients Before Monopolies Act (PBM Act), advocates for the separation of pharmacy services from PBM operations to ensure that patients receive fair and equitable access to prescription medications.
The Patients Before Monopolies Act was spearheaded by Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.), alongside Representatives Diana Harshbarger (R-Tenn.) and Jake Auchincloss (D-Mass.). This bipartisan effort underscores the urgent need to regulate the influence of PBMs, which have come under scrutiny for their practices that potentially harm consumers and independent pharmacies. The bill aims to address the growing concern that major PBMs, such as CVS Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s Optum Rx, control significant aspects of drug pricing and availability, often prioritizing their affiliated pharmacies over independent options.
The proposed legislation outlines several key provisions designed to dismantle existing monopolistic structures. These include:
- Prohibiting any entity that owns a PBM or an insurance company from also owning a pharmacy business, thus eliminating conflicts of interest;
- Mandating that any parent company found in violation of the PBM Act divest its pharmacy business within three years, ensuring compliance;
- Empowering regulatory bodies such as the FTC, Department of Health and Human Services, DOJ’s Antitrust Division, and state attorneys general to enforce divestiture actions and recover any profits gained during violations;
- Directing the FTC to allocate recovered funds to support affected communities, particularly consumers who have faced overcharges due to these practices;
- Requiring full transparency in divestitures reported to the FTC, which will monitor these changes to protect competition, financial integrity, and serve the public interest.
In her statement, Warren articulated the detrimental impact of PBMs on the healthcare market, emphasizing that these entities have exploited their market power to inflate drug prices and undermine independent pharmacies. “PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business. My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen,” she asserted, highlighting the urgent need for regulatory reform to protect consumers.
Hawley echoed these sentiments, reinforcing the notion that insurance monopolies are detrimental to the healthcare experience for Americans. “Patients and independent pharmacies are paying the price,” he stated, emphasizing that the proposed legislation is crucial to curbing the unchecked power of insurance companies and PBMs, which are increasingly taking control of the healthcare landscape. “This legislation will stop the insurance companies and PBMs from gobbling up even more of American health care and charging American families more and more for less,” he added, pointing to the potential benefits for patients and small businesses alike.
The PBM Act has garnered support from a variety of advocacy groups and healthcare organizations, reflecting a widespread recognition of the need for reform. Notable endorsements include the American Economic Liberties Project, AffirmedRx, Patients Rising, National Community Pharmacists Association, American Pharmacy Cooperative Inc, and Pharmacists United for Truth and Transparency, all of which advocate for a healthcare system that prioritizes patient access and affordability.
In contrast, the Pharmaceutical Care Management Association, a prominent PBM advocacy group, has voiced strong opposition to the bill, arguing that it would restrict patient access to safe and affordable pharmacy options. JC Scott, the president and CEO of PCMA, stated, “The truth is PBM-affiliated pharmacies, including mail-service and specialty pharmacies, have a proven track record of providing convenient, reliable, and affordable options for patients to access prescription drugs.” He further claimed that mail-service pharmacies could potentially save patients, employers, and public health plans approximately $23.5 billion over a decade, advocating for the benefits of PBM-affiliated services.
This legislative effort is part of a broader trend to regulate PBMs, following other bills such as the Pharmacy Benefit Manager Transparency Act and the Modernizing and Ensuring PBM Accountability Act. The FTC has recently taken action against major PBMs like CVS Caremark, Express Scripts, and Optum Rx regarding insulin pricing practices, indicating heightened scrutiny of these entities. In response to the FTC’s legal actions, the PBMs have countersued, claiming that the FTC’s lawsuit infringes upon their constitutional rights.
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