Opinion: Congressional priorities need to include Pharmacy Benefit Manager reform

During my time in office, I have developed strong relationships with locally owned pharmacies in my Senate District. These pharmacists provide health care in their communities and at events hosted by my office. They have also shared with me the issues that their small businesses face in remaining open and able to provide critical health care to our neighbors. 

One of their most pressing challenges is the issue of predatory practices by pharmacy benefit managers. That’s why I was proud to support recent state legislation championed by state Rep. Jessica Benham and signed into law by Gov. Josh Shapiro that reforms how these middlemen operate and better protects pharmacy owners and patients. 

PBMs were initially created to negotiate lower prices from drug companies on behalf of patients and employers. They now have the power to determine which drugs are covered by insurance and at what price, as well as which pharmacies patients can use to fill their prescriptions. Instead of benefiting patients, their actions often serve the health care giants that own the PBMs themselves, the insurance companies they negotiate for and the pharmacies that they steer patients to. 

PBMs influence costs and limit access in several ways. First, because they decide what medications are covered by insurance, they can use their formulary to prioritize high-priced drugs over lower-priced alternatives. This can limit patient choices and drive up costs so that PBMs can collect huge fees on pricier medications. PBMs use “spread pricing” to overcharge programs like Medicare. In Pennsylvania alone, the amount taxpayers paid to PBMs for Medicaid enrollees more than doubled in just four years, from $1.41 billion in 2013 to $2.86 billion in 2017.

Three PBMs have solidified themselves as the largest players in the market: CVS Caremark, Optum Rx and Evernorth, owned by CVS Health, UnitedHealth Group and The Cigna Group, respectively. Over the past 10 years, they have seen profits increase 438%. In 2022, their profits were $27.6 billion – more than the NFL and Major League Baseball combined. These middlemen, and others like them, now take nearly 50 cents of every dollar spent on name-brand medications.

The new Pennsylvania legislation addresses PBM practices like steering, pricing transparency and network adequacy. It grants the Pennsylvania Insurance Department regulatory oversight over PBMs and requires transparency reports. This comprehensive reform aims to increase accountability and potentially lower costs for Pennsylvanians, especially those who rely on prescription drugs to manage long-term conditions. However, there is still more that can be done at the federal level.

The Federal Trade Commission issued a recent report spelling out just how powerful PBMs have become and how their rise has restricted patient access to prescription drugs. Additionally, Congress has been actively investigating PBM practices and exploring bipartisan legislative solutions to enhance accountability on the federal level. U.S. Secretary of Health and Human Services Xavier Becerra has even called for their elimination in a recent interview with the Detroit News. 

To successfully lower drug prices for Pennsylvania families, we must take on PBMs – and Pennsylvanians agree. In a recent poll from Lincoln Park Strategies, 55% of likely voters say it is very important that Congress address the broken system that allows pharmacy benefit managers to profit so heavily off our health care system.

I applaud U.S. Sens. Bob Casey and John Fetterman for leading the way on PBM reform by sponsoring legislation like the Prescription Pricing for the People Act of 2023, Protecting Seniors from High Drug Costs Act and the Affordable Insulin Now Act of 2023. 

I ask for Congress’s continued prioritization and passage of this crucial legislation that will help Pennsylvanians and all Americans access more affordable care and prioritize patient access to reasonably priced medications over corporate greed.