Congress should follow our lead on pharmacy benefit reform

by State Rep. Tarik Khan, Democrat, 194th District
Posted 9/19/24

When Gov. Josh Shapiro signed House Bill 1993 into law this summer, he simultaneously enacted my bill improving access to critical health care for over a million Pennsylvania children. My bipartisan bill, led by Rep. Donna Bullock, D-Philadelphia, and co-prime-sponsored by Reps. Seth Grove, R-York, and Jen O'Mara, D-Philadelphia, was attached as an amendment to HB 1993. It will allow parents in Pennsylvania to take their children ages 8 and older to get their routine childhood immunizations at their local pharmacy.

The passage of HB 1993, sponsored by my colleague Rep. Jessica Benham, …

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Congress should follow our lead on pharmacy benefit reform

Posted

When Gov. Josh Shapiro signed House Bill 1993 into law this summer, he simultaneously enacted my bill improving access to critical health care for over a million Pennsylvania children. My bipartisan bill, led by Rep. Donna Bullock, D-Philadelphia, and co-prime-sponsored by Reps. Seth Grove, R-York, and Jen O'Mara, D-Philadelphia, was attached as an amendment to HB 1993. It will allow parents in Pennsylvania to take their children ages 8 and older to get their routine childhood immunizations at their local pharmacy.

The passage of HB 1993, sponsored by my colleague Rep. Jessica Benham, D-Allegheny, was also momentous because it increases transparency around pharmacy benefit managers (PBMs).

As a family nurse practitioner, I've become well-acquainted with the long reach of PBMs, and I must admit, they confuse me. PBMs don't create or make drugs like pharmaceutical companies, nor do they dispense prescription medications like wholesalers and local pharmacies. They also don't allocate the funding from health care premiums like traditional insurance companies.

As a line from the '90s movie classic, "Office Space," once asked: "What ... what would you say ... you do here?" The truth is, none of us truly know exactly what PBMs have been up to.

If you look for a formal definition of PBMs and their impact on the American health care system, you will probably come across the phrase "middlemen." Typically, middlemen help get projects, initiatives or efforts over the finish line, and in return, they receive a fraction of the profit or benefit. Calling PBMs middlemen is an insult to middlemen. Because while PBMs negotiate prices as they stand between health insurance companies, drug manufacturers and pharmacies like middlemen are wont to do — PBMs simultaneously dramatically raise costs for patients and families across the country.

Despite making billions of dollars each year, PBMs continue to raise fees on drugs while lining their pockets with the rebates. At the current rate, PBMs are pocketing a whopping 50% of the list price of every brand-name drug that is sold. For certain drugs, including the popular weight loss injectables Ozempic and Wegovy, the margin can be even higher — 75%. And if you were to ask any of the major PBMs what their role in the health care industry exactly is, you would probably be left with more questions than answers. That's because their practices and impact continue to be shrouded in secrecy while Americans deal with the consequences of paying nearly three times the drug costs of other nations.

Today, just three PBMs — Caremark, Optum Rx and Express Scripts — control nearly 80 percent of the pharmacy benefit manager market. Each of the three major PBMs, which are financially integrated into the publicly traded health care corporation behemoths of CVS, UnitedHealth and Cigna, also have ties to the health insurance industry by way of their parent companies. The largest of the three conglomerates is UnitedHealth Group, which was ranked as the fifth-largest largest corporation in the United States by Fortune in 2023

The rapid growth of the pharmacy benefit manager industry in recent years concerns me both as an elected official and a health care professional. Our health care system should be focused on helping patients access health care and uplifting communities. But PBMs have turned the prescription drug world into a money-making heist. And it's everyday consumers who continue to be on the hook for their unbridled greed.

Here in the Pennsylvania state Legislature, we have reaffirmed our commitment to the health and well-being of our communities by securing greater transparency in the face of PBMs. The passage of HB 1993 is a powerful first step in the fight to lower prescription drug costs and expand accessibility for all Pennsylvanians. And I'm proud to have also gotten my vaccine bill signed into law. But we can't stop there.

Congress should prioritize PBM reform now — both expanding what we've done in Pennsylvania nationally and working to further regulate PBMs — like ending the PBM practice of skimming off the top a large percentage of the money insurers pay to pharmacies. The profits of greedy corporations should not continue to be triaged while the consumers searching for accessible health care remain stuck in the waiting room.