Auchincloss, Warren, Harshbarger, Hawley, Introduce Bipartisan Bill to Cut Drug Costs, Rein in Pharmacy Benefit Managers (PBMs)
Washington, D.C. – Today, Representatives Jake Auchincloss (D-MA) and Diana Harshbarger (R-TN), alongside Senators Elizabeth Warren (D-MA) and Josh Hawley (R-MO), introduced the Patients Before Monopolies (PBM) Act. The bipartisan, bicameral bill will prohibit joint ownership of PBMs and pharmacies, a gross conflict of interest that enables these companies to enrich themselves at the expense of patients and independent pharmacies.
Over the past decade, pharmacy benefit managers (PBMs) — the middlemen between pharmacies and insurance companies — have morphed into large healthcare conglomerates that exercise control over every link in the prescription drug delivery chain. Today, the largest healthcare conglomerates each own a PBM — which pays for pharmacy services — as well as the pharmacy chains that provide those services. This inherent conflict of interest results in higher drug costs for patients and fewer independent pharmacies, but bigger profits for the corporate healthcare giants.
The Patients Before Monopolies (PBM) Act would address this by:
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Prohibiting a parent company of a PBM or an insurer from owning a pharmacy business;
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Requiring that a parent company in violation of the PBM Act divest its pharmacy business within three years;
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Enabling the Federal Trade Commission (FTC), Department of Health and Human Services, Antitrust Division of the Department of Justice, and state attorneys general to issue orders requiring violators of the PBM Act to divest its pharmacy business and disgorge any revenue received during the period of such violation;
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Directing the FTC to distribute any disgorged revenue to harmed communities, including consumers overcharged at vertically integrated pharmacies.
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Mandating reporting of all divestitures to the FTC, and allowing the FTC to review all divestitures and subsequent acquisitions to protect competition, financial viability, and the public interest.
“The PBM industry is rife with self-dealing that raises costs for patients and bankrupts independent pharmacists. No PBM should be allowed to own pharmacies, because it poses an unacceptable conflict of interest when it then sets reimbursement rates for its own versus external pharmacies. Independent pharmacies deserve fair play,” said Representative Auchincloss.
“PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business. My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen,” said Senator Warren.
“As a life-long pharmacist, I know first-hand how unchecked PBM consolidation and vertical integration have allowed these shadowy middlemen to self-deal and manipulate the system in ways that are driving up drug costs, limiting patient choices, and putting the financial screws to independent community pharmacies,” said Representative Harshbarger. “I’m a proud conservative Republican, but we have antitrust laws for a reason. That’s why I’m joining my colleagues in introducing the bipartisan Patients Before Monopolies Act, which will protect consumers and taxpayers, and ensure fair competition by breaking-up these anticompetitive, conflict-of-interest arrangements. Federal regulators should never have let this excessive concentration of our healthcare industry happen in the first place, and so it’s up to Congress to get the job done.”
“The insurance monopolies are ruining American health care. Patients and independent pharmacies are paying the price. This legislation will stop the insurance companies and PBMs from gobbling up even more of American health care and charging American families more and more for less,” said Senator Hawley.
The Patients Before Monopolies (PBM) Act is endorsed by the American Economic Liberties Project (AELP), National Community Pharmacists Association (NCPA), American Pharmacy Cooperative Inc (APCI), Pharmacists United for Truth and Transparency (PUTT), Patients Rising, and AffirmedRx.