U.S. senators and representatives introduced a bill on Wednesday that aims to prohibit the combined ownership of pharmacy benefit managers (PBMs) and pharmacies and require parent companies of PBMs to divest their pharmacy businesses.
The bill is called the Patients Before Monopolies Act (PBM Act) and was introduced by Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.) with Representatives Diana Harshbarger (R-Tenn.) and Jake Auchincloss (D-Mass.).
It comes as PBMs — particularly CVS Caremark, Cigna’s Express Scripts and UnitedHealth Group’s Optum Rx — face scrutiny from the Federal Trade Commission due to being vertically integrated with large healthcare conglomerates. The FTC argues that PBMs have major power over which prescription drugs are available and at what price, and sometimes steer patients to their affiliated pharmacies over independent pharmacies.
To prevent this, the bill would:
Prohibit the parent company of a PBM or insurer from owning a pharmacy business
Mandate that a parent company violating the PBM Act must divest its pharmacy business within three years
Allow the FTC, Department of Health and Human Services, DOJ’s Antitrust Division and state attorneys general to order violators of the act to divest their pharmacy business and return any revenue earned during the violation period
Direct the FTC to allocate disgorged funds to affected communities, including consumers overcharged at vertically integrated pharmacies
Require all divestitures to be reported to the FTC, which can review these actions and any subsequent acquisitions to safeguard competition, financial stability and public interest
“PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business. My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen,” Warren said in a statement.
Hawley echoed Warren’s comments, stating that insurance monopolies are harming American healthcare.
“Patients and independent pharmacies are paying the price,” Hawley said in a statement. “This legislation will stop the insurance companies and PBMs from gobbling up even more of American health care and charging American families more and more for less.”
The PBM Act also has support from several advocacy groups and healthcare organizations. It is endorsed by the American Economic Liberties Project, AffirmedRx, Patients Rising, National Community Pharmacists Association, American Pharmacy Cooperative Inc, and Pharmacists United for Truth and Transparency.
Unsurprisingly, the PBM advocacy group Pharmaceutical Care Management Association came out against the bill, arguing that it would limit access to “safe and affordable pharmacies.”
“The truth is PBM-affiliated pharmacies, including mail-service and specialty pharmacies, have a proven track record of providing convenient, reliable, and affordable options for patients to access prescription drugs,” said JC Scott, president and CEO of PCMA, in a statement. “Mail-service pharmacies could save patients, employers, and public health plans $23.5 billion over 10 years and specialty pharmacies, which are sometimes affiliated with PBMs, have the technology and clinical expertise to enhance the quality of care patients receive, and typically can reduce the cost of extremely expensive specialty drugs by up to 45 percent.”
This is not the first bill with bipartisan support that aims to rein in PBMs. Others include the Pharmacy Benefit Manager Transparency Act and the Modernizing and Ensuring PBM Accountability Act. The FTC has also recently sued CVS Caremark, Express Scripts and Optum Rx over insulin prices. The PBMs responded by countersuing the agency in November, claiming the FTC’s lawsuit is unconstitutional.
Photo: Stas_V, Getty Images
