Top Judiciary Republican: Pharmacy middlemen hurting every day Americans

Each and every day, rising pharmaceutical costs are crushing families across the nation.

Mom-and-pop pharmacies are struggling to keep the lights on as they lose thousands of dollars in reimbursements, failing even to cover the cost of what they originally paid for any given medication.

{mosads}Patients are left to decide whether they can afford their prescription medication or pay for a visit to the doctor.

What’s fueling these challenges? Industry middlemen, also known as pharmacy benefit managers (PBMs).

Pharmacy middlemen play a significant role in determining the prices patients pay at the pharmacy counter. Now just three PBMs account for roughly 85 percent of the market. As a result of this market power, PBMs can demand kickbacks – which they prefer to call “rebates” – that create a perverse incentive for drug companies to raise their prices.  

In theory, PBMs’ negotiations with pharmaceutical companies should bring down costs for consumers. Instead of giving these savings to patient, though, PBMs are pocketing substantial profits while running community pharmacies out of business. When PBMs reimburse for less than the pharmacy pays for the drugs, it makes it impossible for those local health care providers to keep their doors open. Even as prices skyrocket, PBMs are forcing community pharmacies to choose between losing money and filling a prescription or losing business to big-box pharmacies owned by PBMs.

PBMs shun transparency and game the system to charge patients more and reimburse pharmacies less.  

The way PBMs are abusing local health care providers and patients is unfair which is why we need accountability.

This February, Rep. Vincente Gonzalez (D-Texas) and I partnered to reintroduce the Phair Pricing Act. Our bill would guarantee patients at the pharmacy counter directly benefit from the lower costs PBMs negotiate, allegedly on their behalves. This legislation would require PBMs to pass along savings to the patients at the point of sale, rather than allow PBMs to pocket that money behind closed doors. Under this bill, patients could save an estimated $9.2 billion over the next 10 years. This bill has bipartisan, bicameral support, as Sen. John Kennedy (R-La.) introduced the Senate companion to my legislation earlier this week.

If we want to make drug pricing fairer and more transparent, we also need to address pharmacy reimbursement rates. The Prescription Drug Transparency Act, which I reintroduced this February, would stop PBMs from prioritizing their profits over what is best for patients. PBMs currently pressure patients to fill their prescriptions at pharmacies or through mail-order pharmacies owned by those PBMs. They often coerce patients by charging the patient different co-pay fees based on which pharmacy they choose because they get higher profits when a patient goes to one of their pharmacies.

In Northeast Georgia, the majority of patients live in rural communities. While shipping medication to a patient in the heart of Washington, D.C. may not be a burden, shipments to rural areas are often delayed. My legislation would ensure patients can choose their pharmacy based on their needs. This means a senior citizen with high blood pressure can go to their community pharmacy who they depend on for advice. It also means that a diabetic won’t be forced to wait for their insulin to be delivered by mail. This is not an issue of convenience – it is an issue of health and quality of care, which PBMs put at risk when they curb a patient’s ability to choose when and how they fill their prescriptions.

Over the past year, the Trump administration has taken significant steps to increase competition and lower drug pricing. Last November, Department of Health and Human Services Secretary Alex Azar introduced a rule to reform the use of pharmacy price concessions in the Medicare Part D program. The administration’s proposed rule includes key provisions from the Phair Pricing Act and would help bring transparency to a notoriously complex industry.

This Thursday, the House Judiciary Committee is holding a hearing to explore the need for increased competition in the health care market. Representatives will consider whether PBMs are representing the best interests of patients or whether they are working to unfairly line their own pocketbooks. It’s time we stand up to their anti-competitive tactics, and Congress has at least two opportunities to level the playing field in the Phair Pricing Act and the Prescription Drug Transparency Act.

Doug Collins is the Ranking Member of the U.S. House Committee on the Judiciary. He represents the Ninth District of Georgia.