Q: What are pharmacy benefit managers?
A: Iowans may not know exactly what pharmacy benefit managers (PBMs) are, but they do know they’re fed up with sticker shock at the pharmacy counter. Six decades ago, PBMs started out processing drug claims. Then, they evolved into an intermediary between pharmaceutical companies, pharmacies and third-party payers, including health insurance companies, self-insured employers, unions and government programs. Eventually, a complex system emerged, expanding PBMs’ influence and profits instead of driving down costs and improving patient services. For example, PBMs’ business models incentivize purchasing brand name drugs over lower-priced generic drugs. Today, just three PBMs control nearly 80 percent of the prescription drug market. These conglomerates operate out of the view of regulators and consumers, setting prescription drug costs, deciding which drugs are covered by insurance plans, determining how they’re dispensed and pocketing unknown sums that might otherwise be passed along as savings to consumers. What’s more, they undercut local independent pharmacies. Things need to change.
For the better part of a decade, I’ve been laser-focused on shining a spotlight on PBMs. In 2019, as chairman of the Senate Finance Committee, I called the top executives from major PBMs to testify about drug pricing in America. I teamed up with Senator Ron Wyden to conduct a two-year bipartisan investigation into insulin price gouging. And I requested the Federal Trade Commission (FTC) to look into potential anticompetitive practices occurring in the industry. Three bills I co-sponsored have been signed into law, including the CREATES Act, Right Rebate Act and Patient Right to Know Drug Prices Act. In 2023, the Judiciary Committee passed five of my bipartisan bills to boost competition in the pharmaceutical industry and improve patient access to more affordable prescription medicines.
At my annual 99 county meetings, I hear regularly from Iowans who struggle to afford their medications and want to know why getting a prescription filled is so unnecessarily complicated, from mail-order options to confusing coupons and rebates. They also want to know why Americans pay more for the identical prescription medications than patients in other countries. According to theCenters for Disease Control and Prevention (CDC), recent data show nearly 50 percent of Americans used at least one prescription drug in the previous month, nearly 25 percent used three or more prescription drugs and 13.5 percent used five or more. Tens of millions of Americans rely on pharmaceutical therapies to manage chronic conditions, particularly those diagnosed with diabetes, heart disease, hypertension, arthritis and cancer. This is a matter of life and death for loved ones in families across the country. In 2023, the U.S. health care system spent $449.7 billion on retail prescription drugs, more than any other country. American taxpayers and patients aren’t getting the most bang for the buck.
Q: What are you doing in this Congress to hold PBMs accountable?
A: Returning as Chairman of the Senate Judiciary Committee in January, lowering drug prices is among my top legislative and oversight priorities. That includes building on my efforts to shine a bright light on PBMs. To that end, I’m pushing the FTC to finish its work. While I’ve welcomed a couple of its interim reports, it’s time to get the job done. Senator Maria Cantwell, Ranking Member of the Senate Commerce Committee, and I have teamed up to reintroduce a pair of bipartisan bills to combat the high cost of prescription drugs and pull back the curtain on PBMs. Transparency brings accountability. The Prescription Pricing for the People Actwould require the FTC to finish its study in a timely manner and provide policy recommendations to Congress to improve competition and protect consumers. The Pharmacy Benefit Manager (PBM) Transparency Act would ban deceptive and unfair pricing schemes and require PBMs to report to the FTC how much they make through spread pricing and pharmacy fees. Spread pricing is the difference between what PBMs charge a health plan and what they pay to a pharmacy for a certain drug. This practice is costing patients and taxpayers while curtailing access to affordable prescription drugs. I’m committed to bringing sunshine and fairness to the prescription drug marketplace. Learn more about my work to lower prescription drug prices here.