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Bipartisan Efforts Focus on Reforming Pharmacy Benefit Managers to Lower Drug Costs
FIRST ON FOX: A bipartisan coalition of lawmakers is advocating for a significant overhaul of the incentive system governing Pharmacy Benefit Managers (PBMs). They contend that the current model drives up costs for patients by promoting higher-priced drugs and obscuring potential savings.
Spearheaded by Rep. Mariannette Miller-Meeks from Iowa, the new legislative initiative known as the “Delinking Revenue from Unfair Gouging (DRUG) Act” was introduced on Tuesday. This proposal aims to limit PBMs in the commercial market to charging a flat service fee per prescription, rather than allowing them to retain a percentage calculated from the drug’s list price.
PBMs serve as intermediaries between insurance firms, pharmaceutical companies, and pharmacies, playing a key role in managing drug pricing and distribution. Proponents of the DRUG Act argue that the existing incentives lead PBMs to inflate drug prices, ultimately impacting what patients pay out-of-pocket.
“Pharmacy Benefit Managers (PBMs) hold excessive power over the prices that patients encounter at their local pharmacies,” stated Miller-Meeks. “In Iowa, we are witnessing local pharmacies closing their doors due to the damaging practices of PBMs, which has direct consequences on access to necessary medications for our residents. The DRUG Act aims to alleviate pressures on drug prices and insurance premiums by eliminating PBMs’ incentives to escalate medication costs.”
A PERSONAL PERSPECTIVE ON DRUG PRICING
As highlighted, the bipartisan effort reflects a growing consensus among lawmakers, such as Rep. Nannette Barragán from California, who express concerns over how PBM practices disproportionately impact vulnerable populations. Barragán remarked that PBMs often prioritize their financial interests over those of patients, steering them towards less effective but more profitable medication options.
The Iowa Pharmacy Association has raised alarms about the reimbursement models employed by PBMs, which frequently compensate pharmacies below the actual cost of providing medications. This has led to a significant number of pharmacy closures: in 2024 alone, 29 Iowa pharmacies and around 2,300 pharmacies nationwide have shut their operations, according to the association’s findings.
A recent report from the Federal Trade Commission indicated that three major PBMs now dominate nearly 80% of the prescription market in the United States, raising concerns about a lack of competition in the sector.
ADDRESSING COMPETITION IN PHARMACY BENEFIT MANAGEMENT
The reforms proposed in the DRUG Act are designed to enhance competitiveness in the pharmacy market, with the ultimate goal of reducing costs for consumers. Rep. Donald Norcross from New Jersey, another co-sponsor of the bill, emphasized the urgent need for affordable drug prices, stating, “Families in my district are desperately seeking relief from the burden of high prescription costs.”
Norcross concluded with a call for changes that prioritize health care access and affordability. He believes that the DRUG Act can effectively target the cost issues associated with current PBM practices, fostering transparency while putting patients’ needs before profit margins.
As discussions around drug pricing reform continue, the bipartisan support for the DRUG Act reflects a broader push to address systemic issues within the pharmaceutical supply chain, aiming to benefit patients across the nation.
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