A Long Time Coming: Is Pharmacy Benefit Manager Reform Finally Here?

 J Clin Pathways. 2024;10(5)47-48.

Patients, especially those with serious diseases like cancer, require fast, easy access to their treatments. Cancer care teams understand this need innately, and that is why they de­velop relationships with patients. They guide patients through diagnosis and treatment and offer resources for patients to get their medication as easy as possible. More and more often, though, patients and providers are encountering a huge obstacle in the treatment process: pharmacy benefit managers (PBMs).

Created in the late 1960s, PBMs were initially designed to administer prescription drug benefits for insurance companies and negotiate rebates and discounts that would then be passed on to patients. Since that time, PBMs have grown into a hyper-consolidated, multibillion-dollar industry where profits are prioritized over patients. Currently, only three PBMs control nearly 80% of all prescriptions in the US, while pharmacies af­filiated with them account for nearly 70% of all drug revenue for specialties such as cancer. This concentration and vertical integration have given PBMs unprecedented control over pric­es, formulary composition, and patient access to drugs. Worse, these middlemen own or are owned by insurance companies, defeating the entire purpose of their existence in the first place.

Independent community oncologists, associations such as the Community Oncology Alliance (COA),¹ and independent pharmacists have been sounding the alarm about the growing abuses of PBMs for years, and policymakers at the state and federal levels are finally noticing and mobilizing to protect pa­tients. In fact, 2024 has been a marquee year for PBM reform in the US Congress. Every committee that is focused on or has jurisdiction over health care has now advanced proposals to in­crease oversight of PBMs and curb their most egregious prac­tices. There are currently more than 30 bipartisan PBM reform bills before the House and Senate, including the Lower Costs, More Transparency Act (HR 5378); the Modernizing and En­suring PBM Accountability Act (S 2973); and the Neighbor­hood Options for Patients Buying Medicines (NO PBMs) Act (HR 5400, S 2436), to name a few.

One of the recent blockbuster developments in PBM reform is the Federal Trade Commission’s (FTC) interim report on the business practices of PBMs.² The report confirms that PBMs delay, deny, and disrupt the treatment of patients who need care the most. The report also details that a lack of transparency and accountability allows PBMs to make important decisions that net them the most profit instead of the best price for their customers or best decision for a patient’s health. One shocking, but not surprising, fact from the report is that the largest verti­cally integrated PBMs have retained nearly $1.6 billion in extra revenue on two cancer drugs in less than three years by steering business to their affiliated pharmacies.

COA and its members contributed to the FTC investigation over the last two years and worked tirelessly to make policy­makers and regulators aware of the abuses that PBMs enact upon patients and providers. This interim report is an impor­tant step toward investigating and exposing PBM misbehavior.

With significant bipartisan federal momentum, Congress is now grilling PBM executives and considering several impor­tant bills that rein in PBM misbehavior. In late July, the CEOs of the three largest PBMs— CVS Caremark, Express Scripts, and OptumRx—testified before the House Committee on Oversight and Accountability. The hearing saw heated bipar­tisan questioning on the role of PBMs in driving up costs and limiting access to drugs. The CEOs struggled to provide satis­factory answers to the committee, with Oversight Committee Chairman James Comer (R-KY-1) reminding them that they took an oath to tell the truth in their testimony. Several other committee members expressed dissatisfaction with the CEOs’ answers as well and indicated they would be supporting action to rein in PBM abuses.

We’re also seeing a focus on PBMs in State House of state houses across the country. Twenty states have introduced PBM bills during the current legislative session alone, and 43 states have PBM legislation on the books. In some states, lawmakers are requiring PBMs to obtain licensure to ensure they operate under a certain set of requirements. In other states, lawmak­ers are requiring PBMs that interact with state health insurance plans to divulge how they set prices, encouraging competition and transparency. These bills are proposed or law in liberal and conservative strongholds alike, indicating a bipartisan consensus that PBMs are not serving the public interest as is.

The growing movement to take power out of the hands of PBMs and place it back with doctors, pharmacists, and patients is the result of hard work by committed advocates. A few years ago, most lawmakers would have been unable to define what a PBM was, much less understand their negative impact. Thanks to our unrelenting advocacy, PBMs are now at the forefront of the health care conversation. We must maintain this powerful at­tention on PBMs. COA is calling on all cancer care stakeholders to work together to support meaningful legislation that in­creases transparency and accountability for these middlemen.

Learn more about the impact of PBMs on patient care by viewing COA’s series, “PBM Horror Stories.”³