The Grassley-Cantwell measures would mandate that the PBMs be more transparent in their dealings, so parties have a clearer understanding of what they’re paying for prescription drugs and why.
We are at an important crossroads in determining what kind of health care system Americans should have. Increasingly, medical science is providing answers to serious health problems that have plagued generations. For those facing the threat of vision loss, for example, recent years have seen the development and approval of new treatments for leading causes of blindness. The same is true for conditions like cancer, diabetes and heart disease. The question is: Will our system change to enable affordable access to these life-changing therapies? Right now, too many people are facing barriers in getting the medications they need.
Iowa’s Sen. Chuck Grassley is a key figure in determining the answer to this question. Grassley, a Republican, has joined with one of his Democratic colleagues, Senate Committee Chair Maria Cantwell of Washington, in introducing legislation to bring accountability to the players in the prescription drug supply chain who attract little attention even as they exercise enormous power over prescription drug prices and availability.
Pharmacy benefit managers, or PBMs, are middlemen who ostensibly work on behalf of health insurers and state governments to negotiate lower drug prices from pharmaceutical manufacturers in order to generate meaningful savings for employers, taxpayers and consumers. That’s the theory, but it’s not the current reality.
In reality, 80% of the prescription drug market is controlled by just three PBMs, and they are vertically integrated with insurance companies and pharmacies, which allows them to siphon money out of the drug supply chain at multiple stages. While the prices health plans pay for prescription drugs only increased by about 1.0% in 2021, far below the rate of inflation, patients feel like prices are going up. This is due to the fact that PBMs negotiate discounts with drug manufacturers but don’t pass them on to patients. Instead, insurers and PBMs have been shifting more and more out-of-pocket medicine costs onto patients.
Since PBMs also control the formularies that determine which drugs are covered by insurance and which are not, they often show a preference for covering those high-cost drugs which have a larger profit margin for them. Those lower cost drugs that don’t generate greater revenues can be left off altogether. Large PBMs, for example, have denied formulary placement for low-cost generic insulins, favoring instead brand-name variations with a higher price tag.
Iowans struggling with serious health conditions should not have corporations coming between them and their doctors’ judgment on best treatment options. Patients should not be paying more at the pharmacy counter to line the pockets of middlemen.
That’s why the Grassley-Cantwell legislation bears watching. Up to now, the PBMs have evaded scrutiny because they are so large and complex, it’s been difficult to engineer effective solutions to what they are doing to taxpayers and consumers. The Grassley-Cantwell measures would mandate that the PBMs be more transparent in their dealings, so parties have a clearer understanding of what they’re paying for prescription drugs and why. They would also block some of the PBMs’ deceptive and unfair pricing practices.
This legislation would be an important start in making our health care system work for patients instead of PBMs. Medical science is creating the means to make this a healthier country. Congress needs to act now to make sure those health solutions aren’t kept beyond our reach.
Author: Jeanne Burmeister is executive director of Prevent Blindness Iowa.