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Patients can’t afford Congress delaying PBM reform another year

By Robin Strongin, Senior Director of Health Policy

As the 2024 political campaigns intensify, we’re going to be hearing a lot from candidates about what they’re going to do to make healthcare more affordable. The problem is, we’re dealing with high out-of-pocket costs right now and we shouldn’t have to wait until after another election for something to be done about them, especially when the current Congress has solutions today.

As I navigate my husband’s care through his battle with Lewy body dementia and speak to other patients and their loved ones, I have become all too familiar with the practices certain players in our healthcare system use to boost their already extraordinary profits at our expense. Pharmacy benefit managers, or PBMs, are a prime example of this and we urgently need legislation to rein in their actions that are affecting both the costs we pay for care and access to the medicines our families need.

Several committees in both the U.S. House and Senate have been working on PBM reform legislation for months and there are multiple bills that could be passed now and sent to President Biden for his signature. With the time they will be taking off for campaigning, lawmakers have very few days left that they will be in Washington, D.C. this year. It would be all too easy for them to kick this can down the road and let the next Congress deal with it.

We need to raise our voices to demand that they don’t pass on this opportunity to make a difference.

There are two elements of PBM reform that could have an immediate impact on costs and prescription drug accessibility that Congress should pass without hesitation:

  • Disconnect PBM profits from drug prices. Right now, PBMs generate revenues from the rebates they demand from drug manufacturers. The higher the drug costs, the more they make in rebates and, consequently, they steer patients to medicines that cost more and block access to lower-priced generics and biosimilars. Enough is enough. Pass legislation that will have PBMs paid a flat fee for their services and remove the perverse incentives that are forcing patients to pay more and that place financial interests between patients and their healthcare providers.
  • Mandate that the PBMs pass along those negotiated rebates and discounts to consumers. Currently, these middlemen are moving those dollars into their own pockets. These savings should be going to patients at the pharmacy counter. It’s just common sense.

These are urgent issues that affect the lives and pocketbooks of millions of Americans. Yes, it’s great that politicians are making promises about how they will fix healthcare costs next year, but we need action now. Congress must pass PBM reform legislation before they adjourn this year.

NCL on Upcoming Congressional Hearings with UnitedHealth Group CEO Andrew Witty

April 30, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Tomorrow, the Senate Finance Committee and House Energy and Commerce Committee will hear from UnitedHealth Group CEO on the insurance company’s cyberattack that put millions of medical records and patient privacy at risk.

The cyberattack is, of course, cause for concern, but there are also several other ways major insurance companies like UnitedHealth Group are hurting consumers. These companies have taken over the prescription drug marketplace – they are integrated with the pharmacy benefit managers (PBMs) who gatekeep our prescriptions, limiting access and increasing out-of-pocket costs.

Here are the top questions American consumers deserve answers to:

  • How will your company work to not only protect patient data going forward, but also protect patient choice and power in their healthcare decision-making?
  • Can you explain the relationships and makeup of UHG, Optum Rx, and Optum Health? How does this vertical integration give consumers a fair choice when it comes to their health when there is a clear incentive to keep patients – and thus profit – in the UHG family?
  • UnitedHealth Group’s PBM Optum Rx claims to benefit consumers by negotiating rebates with drug manufacturers – why, then, aren’t consumers experiencing lower costs at the pharmacy counter?
  • How much does Optum Rx collect each year in rebates from drug manufacturers? How much profit does the UHG corporation rake in from prescription drug purchases?
  • Is UHG aware of the significant health and financial challenges that prior authorization requirements impose on consumers and their families?

The insurance industry is riddled with poor incentives that ultimately hurt consumers. Lawmakers have an opportunity this week to shine a light on these problems. We need bipartisan reforms to give consumers more power when it comes to their prescriptions, and ultimately, their health.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL statement on PBMs and new GAO report

September 18, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

WASHINGTON, DC – The National Consumers League (NCL) today released a statement following a recently released U.S. Government Accountability Office (“GAO”) report on Medicare Part D rebates.

The following statement is attributable to NCL Chief Executive Officer, Sally Greenberg:

“Investigation after investigation, report after report, and study after study prove that pharmacy benefit managers (“PBMs’) do not provide benefits to consumers. To the contrary, we believe PBMs, who are middlemen, drain billions of dollars that should be going into the pockets of patients and consumers and help them defray their healthcare costs. The evidence mounts that PBMs, which once had a noble purpose, have lost their way and become profit centers unto themselves, adding costs to our drug supply system at the expense of patients. This latest report by GAO underscores that our nation’s seniors – often our most vulnerable patients who rely most on medications – pay the highest price for PBM practices.

“In just one year, GAO found that the PBMs collected almost $50 billion in rebates from prescription drug manufacturers under the Medicare Part D program alone. These savings should go directly to Medicare beneficiaries, but for the nearly 80 of the highest rebated drugs analyzed, GAO found that seniors paid more than $20 billion, while their plan sponsors — often vertically integrated with PBMs — paid only $5.3 billion. PBMs are able to enrich themselves because they control access to prescription drugs, block competition, conduct business in the shadows, and pocket discounts meant for patients. PBMs simply driving up out-of-pocket costs for Medicare beneficiaries to the tune of millions of dollars.

“Congress has an opportunity to enact meaningful PBM reforms to prevent such behavior. We urge our leaders in Congress to closely examine the findings of the GAO report, and put a stop to the practices of PBMs to profit off of vulnerable patients. In doing so, our elected representatives will put money back in the pockets of patients and help them to better afford the medications they need.”

Learn more about NCL’s work to address the PBM problem at nclnet.org/pbms.

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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.