In December 2024, the unlikely pairing of Sen. Elizabeth Warren, D-Mass. and Sen. Josh Hawley, R-Mo. introduced a bipartisan bill entitled the Patients Before Monopolies Act. Reps. Diana Harshbarger, R-Tenn, and Jake Auchincloss, D-Mass., introduced the same bill in the House. However, the bill died at the close of the final session for Congress on January 3, 2025. With the change in administration, it is unclear whether Congress will take up the same or a similar bill, although both parties agree that PBMs must be regulated.
The bill directly struck the three big pharmacy benefit managers (PBM): Cigna’s Express Scripts business, CVS Health’s Caremark, and UnitedHealth’s OptumRx. It banned anyone from simultaneously owning a pharmacy and an insurance company or a PBM and a pharmacy.
PBMs provide prescription drug benefits for insured individuals on behalf of health insurers, employers’ self-funded health plans, and other entities. However, independent pharmacies and the Federal Trade Commission (FTC) have objected to PBMs, claiming that they use their monopoly to direct patients toward the giant chain pharmacies they own, which is a major conflict of interest. Each large healthcare organization owns a PBM and at least one pharmacy chain.
As a result of these healthcare conglomerates, large pharmacies charge patients higher prices, keep a large percentage of the discounts that they get from drug manufacturers to increase their profits and take business away from smaller independent pharmacies. Bill sponsors say that the PBMs’ actions drive independent local pharmacies out of business, leaving patients, particularly in rural areas, with long drives to chain pharmacies or mail-order prescription drugs.
In contrast, JC Scott, the CEO of the Pharmaceutical Care Management Association, the trade group for PBMs, says that PBMs aim to help patients access affordable prescription drugs. According to Scott, PBM-affiliated pharmacies, including specialty and mail-order pharmacies, could save patients, employers, and some health plans over $23 billion over the next ten years. Scott claims that PBMs’ specialty drugs can reduce the costs of some more expensive drugs by as much as 45%.
Under the Patients Before Monopolies Act, insurers and PBMs now owning pharmacies would have had three years to separate themselves. After that, federal and state regulators could have filed suit in to force the entities to divest themselves of the pharmacies. Any profits from selling prescription drugs disgorged during these lawsuits would have gone to an FTC fund to serve the healthcare needs of the community harmed by the illegal activity.
The Act defined a PBM as any person, business, or other entity that, either directly or indirectly, through an intermediary or an arrangement with a third party:
- Acts as a negotiator of prices, rebates, fees, or discounts for prescription drugs on behalf of a health plan or its sponsor;
- Contracts with pharmacies to create, design, and manage pharmacy networks; or
- Manages or administers the prescription drug benefits provided by a health plan through various functions.
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