Patients and Pharmacists Struggle Against PBM Industry’s Influence on Drug Prices
By Consumers for Quality Care, on December 4, 2024
Pharmacy benefit managers (PBMs) are under scrutiny for inflating prescription-drug prices, steering patients toward costlier options and threatening the survival of independent pharmacies, according to Fox 8 Live.
PBMs are powerful intermediaries between drug manufacturers, pharmacies, and insurers. The three largest PBMs, controlled by some of the largest health care corporations – CVS Health, Cigna, and UnitedHealth Group – manage nearly 80 percent of the U.S. prescription drug market.
Stephen Caillouet, a retiree in Louisiana, struggles with the unpredictable costs associated with his blood-thinner medication. Just this year, the cost of his medication more than tripled. “I can’t afford that. But I got to do what I got to do,” said Caillouet. He’s now cutting back on essentials, like food, so that he can afford his medication.
Independent pharmacists like Ella Vasquez and Minh Nguyen believe PBMs exert too much control over pricing and reimbursement. They claim that PBMs steer patients toward mail-order services and more expensive brand-name drugs instead of generics. These tactics increase costs, and they’re also leading to the closure of one independent pharmacy on average per day. Nearly a third of pharmacy owners attribute closures to PBMs’ practices, a National Community Pharmacists Association survey found.
Vasquez likened the struggle to “David fighting a big Goliath,” noting that PBMs often reimburse independent pharmacies below the cost of acquiring medications, threatening their financial viability. Nguyen fears closures of local pharmacies could create pharmacy deserts, forcing consumers to travel longer distances to obtain their medications.
Now, regulators and lawmakers want to rein in PBMs. This summer, the Federal Trade Commission (FTC) filed a lawsuit against the three largest PBMs over their price-negotiation tactics for critical prescription drugs, including insulin.
“These are giant corporate middlemen, who are exercising an enormous amount of power over how much Americans are paying for critical medication, which pharmacies they can go to, how much they will pay, how much the pharmacies will make,” said FTC’s Director of the Office of Policy and Planning, Hannah Garden-Monheit. “And we are quite concerned that these middlemen are using their power to make more and more for themselves, even as patients pay more.”
Congressional committees have also launched investigations into the industry, and lawmakers on both sides of the aisle have called for reforms to increase transparency and reduce anticompetitive practices.
If left unchecked, PBMs will continue their anticompetitive practices, forcing independent pharmacies to shut their doors, limiting consumers’ access to affordable medications. CQC urges lawmakers and regulators to continue scrutinizing PBMs and to take action and ensure access to affordable care for all consumers.
