A policy agenda unicorn is unfolding in Washington.
The Senate Health, Education, Labor, and Pensions Committee is poised to consider legislation aimed at reining in rising prescription drug costs. And the committee’s leading members, liberal Sen. Bernie Sanders (I-VT) and conservative Sen. Bill Cassidy (R-LA), seem to be—at least somewhat—on the same page. The two have introduced legislation that would tackle the middlemen of the drug supply chain.
The unity that has blossomed between warring political factions is refreshing—and needed. These entities—called Pharmacy Benefit Managers (PBMs)—are largely responsible for the ballooning cost of medicine.
In their role as middlemen, PBMs are able to use their significant leverage to profiteer on the backs of patients and independent pharmacies—siphoning tens of billions of dollars from the drug supply chain every year. Reacting to the questionable PBM practices in an April hearing, Rep. Buddy Carter (R-GA) went so far as to call them “gangsters.”
As a result, drug costs have been rising for years—with expenditures on prescription medicine more than tripling since 2000. But what’s really turned a big problem into a crisis is the persistently high inflation that continues to plague the economy across the board. As prices for everything from eggs to vehicles balloon, the financial squeeze is forcing Americans to make tough choices.
What exactly is on the table?
As part of a package of bills that is being considered by the Senate HELP Committee, lawmakers are aiming to inject price transparency and oversight into the medicine supply chain. Notably, the Pharmacy Benefit Manager Reform Act would address a particularly concerning PBM business practice called “price spreading.”
In short, PBMs frequently charge patients—or their insurance companies—more than what is paid to dispense the drug at the pharmacy. And the difference is pocketed as profit. The bill would nix that practice—ensuring the price point that plans cover more closely aligns with dispensing costs.
Other reforms that should be considered include forcing rebates that are already provided by drugmakers to be passed down to patients at the pharmacy counter as savings. Currently, PBMs swipe more than $200 billion in rebates annually—money that could go a long way to easing inflationary pressures for prescription drugs.
Efforts to address PBM middlemen in Congress are a good first step. But policymakers should parlay the political appetite to pursue additional bi-partisan healthcare reform priorities.
Lifting regulations that restrict the use of short-term and association health plans will foster more patient choice and lower costs. Expanding the use of personal health management accounts will give Americans more control over their healthcare dollars. And promoting direct primary care as a viable supplement to traditional insurance-funded, hospital-based care will help patients get the care that best fits their unique circumstances.
The bipartisan unity unfolding in Washington is encouraging. But rhetoric and committee hearings don’t necessarily translate to meaningful change. Policymakers need to capitalize on the moment and push reforms that will lower costs for patients over the finish line.