Americans can't afford their out-of-pocket costs at the pharmacy counter. Legislators on both sides of the aisle are taking action.

I’ve been involved in health-care advocacy for decades – first on behalf of big, for-profit insurers and more recently for patients struggling to get the care they need and can afford – and I can’t recall a time when Democrats and Republicans have come together as they have this year to rein in the rapacious business practices of my former employers and their pharmacy benefit managers (PBMs).

Over the past five years, just three big insurers – Cigna (where I used to work), CVS/Aetna and UnitedHealth – have gained near total control over whether Americans will be able to get the medicines their doctors prescribe and how much they’ll have to shell out at the pharmacy counter.

Together, those three companies have captured 80% of the PBM market. That rapid consolidation has enabled them to implement practices that essentially guarantee massive profits. As a consequence, millions of patients are walking away from that pharmacy counter empty-handed because they can’t afford what those insurers demand they pay out of their own pockets before their coverage will kick in.

As lawmakers on both sides of the Capitol and political divide have heard from their constituents about the dire straits they’re now in, Democrats and Republicans have introduced a slew of bipartisan bills to put an end to some of the PBMs’ most egregious practices.

Earlier this year, most pundits, including me, were skeptical that any of those bills would cross the finish line this year, especially in the face of massive lobbying by the industry. But there now is unmistakable momentum for meaningful reform. The bills are moving through the committee system and in one form or another could reach both the Republican-controlled House and the Democrat-controlled Senate floors for final votes before the end of the year (if, of course, the current leadership fight in the House is resolved).

As journalist Michael McAuliff wrote in Modern Healthcare a few days ago:

Historic levels of dysfunction and infighting may be roiling Congress these days, but lawmakers appear primed to act as soon as they can on at least one issue: Cracking down on pharmacy benefit managers.

McAuliff noted that Senate Majority Leader Chuck Schumer (D-N.Y.) has pledged to move legislation to the Senate floor that would combine elements of various PBM bills in that chamber. The House has already united several PBM bills into one consolidated measure. That bill, he wrote, “is among the first in line to get floor consideration once the lower chamber chooses a new speaker.”

Among other things, the bills would require PBMs to disclose how much they pay for drugs, how much they keep to pad their bottom lines, and how much in savings (if any) they pass on to patients and employers that offer pharmacy benefits. They would ban or restrict so-called spread pricing, in which insurers/PBMs charge patients more for drugs than the PBMs paid for them. Some, like the one before the Senate Finance Committee, would prohibit PBMs from linking what they pay for drugs to the manufacturers’ list price of those drugs. As McAuliff wrote, many members of Congress and outside groups argue that linking PBM compensation to list prices creates a perverse incentive for drug companies to raise prices. 

Sens. Tom Carper (D-Del.), John Cornyn (R-Texas), Thom Tillis (R-N.C.), and Sherrod Brown (D-Ohio) are leading another bill that would ensure savings are passed on to seniors enrolled in the Medicare Part D prescription drug program. As they explained when they introduced the bill in July, PBMs and insurers often require that patients pay cost-sharing based on the full list price of medicines, not the net price negotiated by the PBM or insurer when filling prescriptions. This, they said, increases costs for patients at the pharmacy counter and can even lead to patients paying more for a medicine than their insurer did.

“For far too long, pharmacy benefit managers have been pocketing rebates from manufacturers rather than passing them on to patients,” said Carper. “Patients, especially those with chronic conditions who take medications on a regular or permanent basis, should have access to affordable prescription drugs at the counter.”

Their bill would require full rebate pass-through for chronic condition medicines in the deductible or when patients owe coinsurance “and ensure that the patients who are most likely to face high out-of-pocket costs directly benefit from the savings that PBMs and plans negotiate on their behalf.” This should lead to improved adherence and lower use of non-drug medical services like fewer hospital stays and provider visits, they said.

That, in my view, is especially important because the end result of whatever bills are passed must reduce how much patients have to pay out of pocket for their often life-saving medications and make it more likely they’ll take them as prescribed. 

Consensus legislation that emerges should also include language in another bipartisan Senate bill, sponsored by Sens. Jon Tester (D-Mont.), Roger Marshall (R-Kan.), Tim Kaine (D-Va.), and Mike Braun (R-Ind.) that would only allow PBMs to charge a flat fee for their services. As the senators noted when they introduced the bill last May, PBMs make less money from lower-cost drugs, so those drugs often get left off PBM formularies and are consequently not covered by insurers. Their bill “seeks to disrupt that incentive and lower drug costs by delinking PBM’s revenue streams from the list price of drugs,” they said in a press release. 

“Worst of all,” Marshall said, “PBMs discriminate against generic or lower-cost brand competitors. This ultimately leaves patients, the most important group in all of health care, with less choices and higher costs.”

Tester added that “PBMs have been price gouging consumers with bad incentives and hidden fees, and it’s about time we hold these massive corporations accountable.”

If you care about saving money on your prescription drugs, now would be a good time to call your members of Congress. Tell them you expect them to vote for PBM reforms that not only eliminate profiteering but also – and most importantly – give patients much-needed relief at the pharmacy counter.