Our View: Act now to restore hope for real drug pricing reform
The bipartisan Restoring Hope for Mental Health and Well-Being Act of 2022 passed by over 400 votes in the U.S. House on June 22. This bill not only provides U.S. citizens with the opportunity to improve the current condition of mental health access in the U.S.; it contains a section that will be the best hope for finally driving down drug prices.
Section 602 of the mental health bill — H.R. 7666 — introduced by Rep. Michael Burgess, M.D., R-Texas, provides much-needed transparency requirements for Pharmacy Benefit Managers. This newspaper as well as The Columbus Dispatch in Ohio have been advocates for reform regarding the control and profiteering of PBMs in the pharmaceutical market. PBMs are middlemen in the drug space who were granted the legal right to collect kickbacks in 2003. The kickbacks present a huge conflict of interest as PBMs create formularies, the list of medications that are covered for each insurance company.
Pharmaceutical companies can simply buy their way onto the list of meds that patients take, with the PBM in the driver seat. There is currently no transparency for these kickbacks (aka rebates) but in 2020, sources hinted that the total amount of kickbacks approached $200 billion per year. Worse yet, the largest of the PBMs and the biggest insurance companies have merged together into profiteering machines that are responsible for the lion's share of medication costs; 80%, in the case of insulin.
Under Section 602, PBMs must provide salient financial information, as well as rationale for formulary placement and a list of competing medications that were left off of the formularies, among other things. This is excellent news, as now patients and physicians will be able to see exactly how and why PBMs are making clinical decisions as to what medications may also deserve formulary placement. Note, dear readers, given the cost of medications that has risen over recent decades, it is not your physician who is choosing what medications you are able to take. You are forced to take what is covered, because that is what you can afford out of pocket. Note also, that your out-of-pocket cost is only a fraction of what the PBMs are pocketing.
The mental health bill, with nearly all House members in approval, must naturally be considered in the Senate. For the sake of Americans, especially those suffering from chronic disease, the Senate version must not soften transparency or penalties incurred by PBM.
Need some more prodding? If you look on the Fortune 500 top 12 companies, you will find three companies that own PBMs. CVS Health, which owns the PBM CVS Caremark; United Healthcare, which owns the PBM Optum Rx; and Cigna, which owns the PBM Express Scripts, control 85% of the prescription drug market, and are the biggest revenue generators for their parent companies.
For example, when the insurance company Cigna purchased Express Scripts in 2019, its revenues tripled. Similarly, the PBMs of United and CVS health are outsized cash cows for their parent companies.
In 2020, the Trump administration introduced an executive order that made the kickbacks (rebates) flow to seniors at the pharmacy counter. In other words, the PBMs would no longer be collecting these kickbacks. Seniors would instead benefit. Former DNC chair Howard Dean, M.D., stated that this order would "dramatically lower out-of-pocket costs for tens of millions of older adults and help them afford lifesaving expensive medicines."
Some sectors of Congress seem all too willing to continue to grant the PBMs ever more favors. Three bills have passed within a year that have delayed the Trump rebate rule, thus helping the PBMs: The infrastructure bill, the gun bill and the insulin bill. All three have the rationale of delaying the rebate rule claiming that the delay saves the taxpayers money. It does not, and any that advocate that it does are using a third-rate accounting gimmick for justification.
On July 19, Majority Leader Chuck Schumer seems poised to push on with one party-led legislation on drug pricing. This is ill advised, and not only because it is openly partisan. Dozens of patient advocacy organizations have led the cry that Medicare negotiation of drug prices will endanger innovation. It really matters when you or a loved one are diagnosed with an illness for which there are few, if any, cures. Newer therapies, such as Car-T therapy for lymphoma are curing patients that otherwise would not be with us. The Senate ought instead to push ahead with bi-partisan led measures that include PBM reform, such as the work already underway by Senate leaders Maggie Hassan, D-NH, and Susan Collins, R-ME.
Want to stand for Americans? Want to stand for those with diabetes, cancer, depression, multiple sclerosis, and a host of other chronic diseases? Call your Senators, both of them, regardless of your party or theirs, and demand drug pricing reforms that hit the profiteering PBMs in the pocketbook. While you are there, tell your Senators to hop to it and pass a mental health bill that retains the strong PBM reform language of Section 602 of the Restoring Hope for Mental Health and Well-Being Act of 2022, legislation that has already passed the U.S. House in a strong and bipartisan manner.
This article originally appeared on The Intelligencer: Our View: Act now to restore hope for real drug pricing reform
