By Brendan Scanland
WASHINGTON, D.C. — High drug prices are shaping into a major policy issue in the nation’s capital.
The issue is nothing new, but it has been receiving more attention as the Trump administration, lawmakers and community pharmacy advocates look to crack down on the middlemen accused of making it worse.
The middlemen, known as Pharmacy Benefit Managers, or PBMs, were originally designed to act as intermediaries between pharmacies and insurance companies, negotiating costs and discounts. But as more Americans shifted from paying out of pocket to relying on insurance, PBMs began playing a much bigger — and more profitable — role.
“Over time, that good idea has morphed into something that has allowed them to be the judge, the jury and the executioner for all things prescription drugs,” said Doug Hoey, CEO of the National Community Pharmacists Association.
“There is no longer negotiation between the pharmacy and the insurance company. The insurance company tells the pharmacy what they’re going to pay, they tell the patient what pharmacy they can go to. And they also, in many cases, decide which drugs the patient can take,” said Hoey. “We don’t think that’s right.”
Hoey and community pharmacists across the country are sounding the alarm, calling PBMs a root cause of both high drug costs and widespread pharmacy closures.
“Pharmacies are in trouble from an economic standpoint… it’s not a little guy problem,” Hoey said. “But the big guys are closing too: Walgreens, Rite Aid, even CVS, which owns its own PBM, they’re closing brick and mortar stores.”
And when pharmacies close, patients suffer.
“So, less choice, less places for people to go to get their medicine,” Hoey said.
Hoey also says PBMs are overcharging government programs like Medicaid and Medicare, which means taxpayers are footing the bill.
When asked, “Are taxpayers getting ripped off?”
“100%,” Hoey replied. “There is runaway waste with the way that the PBMs are managing the drug benefits for our taxpayer dollars.”
Hoey says legislation that community pharmacists are supporting would save taxpayers $5 billion. Some of the proposed reforms would require PBMs to be more transparent and compensate pharmacies based on drug cost, plus a simple dispensing fee.
“Boil it all down, what we’re advocating for is a simpler process, a more transparent process and a more predictable process,” said Hoey.
On Capitol Hill, lawmakers like Rep. Nick Langworthy (R- NY.) are joining the push to rein PBMs in.
“They’re essentially a middleman… and it hasn’t really saved anybody money. No one can figure out why they’re there,” said Langworthy. “It’s wrong, it’s a legalized monopoly and its set up to essentially crush the little guy. And we’re not going to tolerate it anymore.”
With pharmacy doors closing and patients paying more, reformers say the clock is ticking — and the pressure is on for Congress to act.
