Bipartisan Push to Reform Pharmacy Benefit Managers Aims to Lower Drug Costs

FIRST ON FOX: A coalition of bipartisan lawmakers is spearheading a significant reform initiative targeting the incentive structure of Pharmacy Benefit Managers, more commonly known as PBMs. These legislators assert that the current system escalates patient costs by incentivizing PBMs to promote higher-priced medications while suppressing potential savings that could benefit consumers.

Dr. Mariannette Miller-Meeks, the Republican Representative from Iowa, is leading this charge with the introduction of the “Delinking Revenue from Unfair Gouging Act,” also referred to as the DRUG Act. This legislation, unveiled on Tuesday, mandates that PBMs operating within the commercial market charge a flat fee for their services related to specific prescription drugs. By doing so, the bill seeks to eliminate the existing practice that permits PBMs to charge a percentage based on the drug price.

Understanding the Role of Pharmacy Benefit Managers

PBMs act as intermediaries, bridging the gap between insurance companies, drug manufacturers, and pharmacies. Their role revolves around managing drug prices and facilitating access to medications. However, sponsors of the DRUG Act contend that the current incentive model actively encourages PBMs to inflate drug list prices, ultimately increasing their profits at the expense of patients.

Local Impact on Pharmacies and Patients

Miller-Meeks articulated the challenges faced by pharmacies in Iowa. She stated, “PBMs exert excessive influence over the costs incurred by patients at the pharmacy counter. As a result of these unfair practices, local pharmacies are shuttering their doors, limiting access to essential medications for residents across Iowa. This legislation will alleviate the financial pressure associated with prescription drugs and health insurance premiums by removing incentives that prompt PBMs to inflate prices.”

Concerns Over Reimbursement Practices

The Iowa Pharmacy Association highlights troubling reimbursement models employed by PBMs. These models often reimburse pharmacies at rates lower than the actual cost of drugs and the related dispensing services. Such practices have compelled numerous pharmacies to close, with reports indicating that 29 pharmacies in Iowa and approximately 2,300 nationwide ceased operations in 2024.

The Dominance of Major PBMs

While PBMs have historically contributed to enhancing medication accessibility, mergers and acquisitions have resulted in an alarming concentration of power within the industry. A Federal Trade Commission report from 2024 reveals that the three largest PBMs manage nearly 80% of all prescriptions filled in the United States. This dominance raises significant concerns regarding competition and pricing transparency, which the DRUG Act aims to remedy.

Addressing Inequities in the Health Care System

Co-sponsor of the DRUG Act, Representative Nannette Barragán from California, underscored the detrimental effects of the current system. She commented, “Pharmacy Benefit Managers significantly contribute to the high costs of medications because they are motivated to direct patients towards drugs that are financially beneficial for PBMs, even when these may not be the most clinically effective options for patients. This flawed system disproportionately impacts low-income individuals, seniors, and those with chronic conditions who depend on crucial medications for their well-being.”

A Call for Affordable Health Care

Another co-sponsor, Representative Donald Norcross from New Jersey, voiced the urgent need for relief from escalating prescription drug prices. He remarked, “Families in my district are pleading for affordable health care and access to reasonably priced prescription drugs. The DRUG Act will help to control prescription drug costs by eliminating the profit-driven incentives for PBMs, enhancing transparency, and placing patients’ interests above corporate profits.”

Hope for Comprehensive Change

As the call for reform grows louder, the DRUG Act represents a pivotal moment in the ongoing battle for affordable health care in the United States. With its focus on dismantling problematic incentive structures within the PBM industry, advocates hope this legislation will pave the way for sustainable solutions that benefit both patients and local pharmacies alike.

As discussions about drug pricing and health care accessibility continue, measures like the DRUG Act could lead to meaningful changes, ultimately ensuring that patients pay fair prices for their medications. The outcomes of this legislative effort will be pivotal in shaping the future landscape of health care and prescription drug pricing in the nation.