Biden Executive Action Sides with Middlemen, Rather than Patients

The Biden administration is handing down executive orders at record pace, but some are worse than others. Although it received little attention amid the clash between Reddit and Wall Street, one recent executive action will impact Americans at the pharmacy counter. President Biden has delayed the implementation of the rebate rule—a policy aimed at lowering the cost of prescription drugs.

The rule, developed by the previous administration, targets one specific cause of bloated drug prices: pharmacy benefit managers, or PBMs, and their backroom system of rebates.

Under the current system, insurance companies hire these PBMs to help coordinate which drugs should be covered under specific plans and to manage pharmacy benefits. Seems reasonable enough, but that’s only part of the picture. Since PBMs act as the gatekeepers between drug companies and the patient market, they’re able to use their influence to negotiate big discounts on pharmaceuticals. After pocketing a portion of that money, PBMs pass the rest on to the insurance companies, which in theory helps control premium prices, but does little to lower drug costs at the point of sale.

Read the full op-ed in the Detroit News by Dr. Chad Savage, the founder of YourChoice Direct Care in Michigan and a member of the Job Creators Network.