With the current state of politics in 2024, one might think Republicans and Democrats cannot agree on anything. However, recently, lawmakers in Washington, DC, and here in New Jersey found bipartisan consensus on an important issue: making prescription drugs more affordable by cracking down on the abusive practices of pharmacy middlemen or Pharmacy Benefit Managers, better known as PBMs.
In Congress, Republicans and Democrats on the House Committee on Oversight and Accountability recently heard testimony from three of the biggest PBMs after the Federal Trade Commission released a scathing interim report on the industry.
The report detailed how PBMs intentionally drive up the costs of medicines and impact the accessibility of prescription drugs for consumers by setting higher prices for drugs and even (shockingly) overcharging for cancer medicines. As a result, nearly 30 percent of Americans surveyed reported they rationed their medicines or skipped doses due to high costs.
Because they essentially hold a monopoly over the prescription drug market, PBMs also threaten access to medicines in rural areas by imposing harmful, unfair contract terms on small independent pharmacies. Due to these predatory practices, many independent pharmacies are struggling to stay in business and a large number have closed their doors, creating pharmacy deserts in some rural areas.
During the hearing, Chairman James Comer (R-Kentucky) told the executives, “You’re the problem. Not only are you prioritizing higher-cost medications; you’re setting radically different prices for medications across the country. This is why just about every state now is taking up PBM reform.”
The House Oversight Committee obtained over 140,000 documents and communications from the three largest PBMs which control 80 percent of the health market: CVS Caremark, Express Scripts, and OptumRx. The Committees report, “The Role of Pharmacy Benefit Managers in Prescription Drug Markets,” show how PBMs inflate prescription drug costs and interfere with patient care for their own financial benefit.
Some of the results from the report will be truly shocking to consumers. The report found that anti-competitive policies of the largest PBMs have jeopardized patient care, cost taxpayers, and reduced patient choice. For example, the Committee found that PBMs have intentionally overcharged or withheld rebates and fees from many taxpayer-funded health programs. Additionally, the Committee found that in these taxpayer-funded health programs, PBMs use their position as middlemen to steer patients to the pharmacies they own rather than pharmacies that may have closer proximity or provide better care.
Here in New Jersey, Gov. Murphy signed several bipartisan measures into law to establish greater oversight of PBMs. However, after the indicting FTC report was released, a group of New Jersey lawmakers and independent pharmacists announced they would spearhead additional legislation to address the impact of PBMs and the crisis of rising drug costs in New Jersey.
It’s clear, the only “benefits” provided by PBMs are in the form of their own profits. Patients Come First New Jersey applauds our lawmakers at the state and federal level for exposing the disreputable practices of PBMs to ensure transparency, accountability, and affordability for all Garden State patients.
Jeanette Hoffman is executive director of Patients Come First, New Jersey, a national patient advocacy organization that fights against policies that create barriers for patients and cause delays in innovation.
