


A bipartisan Senate duo is introducing legislation to make pharmacy-benefit managers, the middlemen of drug pricing, divest their pharmacy businesses within three years.
Sens. Elizabeth Warren (D-MA) and Josh Hawley (R-MO) are co-sponsoring the bill, acting on years of scrutiny from the Federal Trade Commission and Congress toward companies who own health insurers, or pharmacy-benefit managers, known as PBMs.
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“PBMs have manipulated the market to enrich themselves—hiking up drug costs, cheating employers, and driving small pharmacies out of business,” Warren said. “My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen.”
Hawley said the legislation “will stop the insurance companies and PBMs from gobbling up even more of American healthcare and charging American families more and more for less.”
There is also a companion bill scheduled to be introduced to the House on Wednesday regarding the history of the government blocking joint ownership within industries.
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It is unlikely that the bills would get passed during this lame-duck session of Congress, but its bipartisan nature could lay the groundwork for success next year. The support from both Republicans and Democrats comes from probes and hearings of health-industry business practices that critics and lawmakers have said resulted in increased drug costs.
If the legislation is passed, it would be the most intensive intervention into the dealings of PBMs and their conflicts of interest.
PBMs have the power to influence what medications insurance plans pay for and how much, serving as a direct line of frustration for patients who have felt dissatisfaction toward the health insurance they actively pay for.
The three biggest PBMs, CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealthGroup’s OptumRx, belong to companies that own some of the nation’s biggest health insurers, creating a pathway for monopolization opportunities.
PBMs use their purchasing power to get the cheapest products possible from drugmakers, claiming they help insurance plans keep costs down and lower premiums paid by patients. However, some doctors, patients and drugmakers say that the firms have actually increased costs while adding fees to boost their revenue.
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PBMs also have the ability to direct drug dispensing through the pharmacy they’re overseeing, sometimes at a higher price, at the expense of independent retail stores. Also, mail-order pharmacies frequently wind up costing much more than normal pharmacies, the Wall Street Journal reports.
The FTC and Congress have taken action against PBMs through investigations into their pharmaceutical dealings with patients. The House investigation discovered that PBMs sometimes make patients pay more for their local pharmacy than the PBMs at mail-order pharmacies, and an investigation by the FTC found that PBMs charge more for cancer treatments and direct patients away from cheaper drugs.