(C) Ohio Capital Journal
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Pharmacists bemoan loss of prescription drug middleman reforms from government spending package • Ohio Capital Journal [1]
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Date: 2024-12-19
Measures intended to control prescription drug costs seem dead after President-elect Donald Trump and Elon Musk on Wednesday worked to sink a bipartisan deal to fund the government.
Now, under a new Republican plan released Thursday evening, gone are measures that community pharmacists say were the most significant efforts so far to rein in pharmacy middlemen they say are largely to blame for the rising cost of prescription drugs. They’re measures for which Trump himself had voiced support.
With an approaching deadline for a divided Congress to pass a bill to keep the government open, Elon Musk and Ohio’s Vivek Ramaswamy worked Wednesday morning to undermine it. Ramaswamy is helping Musk lead Trump’s unofficial “Department of Government Efficiency.”
Both men issued public statements slamming the continuing resolution as containing too much “pork,” or unnecessary government spending. Musk’s own companies have received tens of billions in government funds.
But by Wednesday afternoon, Trump and many congressional Republicans joined the stampede and cast the spending agreement into grave doubt. If a deal isn’t passed, the government will shut down at midnight on Friday.
As of Thursday evening, the latest Republican proposal had dropped reforms of the pharmacy middlemen, known as pharmacy benefit managers, or PBMs.
“A (continuing resolution) that includes health provisions but excludes bipartisan PBM reform is an embarrassing capitulation to the health insurance lobby,” Rep. Jake Auchincloss, D-Mass., posted on X. “GOP leadership just backed down from the fight to lower Rx drug costs.”
The three largest PBMs control access to 80% of the insured patients in the United States. Each is part of a sprawling health conglomerate that is among the 15 largest corporations by revenue in the country.
They work on behalf of insurers (their parent companies each own a top-10 insurer) to manage transactions with drugmakers and pharmacies.
Because PBMs decide which drugs are insured, they have great leverage to extract non-transparent rebates and fees from drugmakers in exchange for covering their products. That’s a practice that research and the Federal Trade Commission have said raises out-of-pocket costs, especially for poorer patients.
Meanwhile, pharmacies say that the PBMs use a dizzying array of non-transparent cost lists to reimburse them for the drugs they dispense, and they say the reimbursements often don’t cover their expenses. In Ohio in 2017, two of the big three billed the Medicaid system almost a quarter-billion dollars more for drugs than they paid the pharmacies that dispensed them.
Since 2018, the role the PBMs play in drug costs has received increasing public scrutiny. State attorneys general and federal regulators have filed lawsuits and legislatures have attempted to curb their practices.
As the U.S. House of Representatives hashed out a spending plan in recent weeks, critics’ concerns about PBMs seemed to be getting a receptive ear. On Tuesday, the National Community Pharmacists Association issued a statement titled “We’re on the Verge of Groundbreaking PBM Reforms.”
Among the measures in the continuing resolution was one that would stop PBMs from paying hundreds of different, non-transparent prices for the same drug in state Medicaid programs. Instead, all reimbursements would be based on the same, publicly available list, and PBMs would be paid a flat administrative fee. That measure would save taxpayers an estimated $1 billion over 10 years, according to the pharmacists association.
Another measure would stop PBMs from imposing take-it-or-leave-it contacts on pharmacies in Medicare Part D programs. Pharmacies have been going out of business in droves, and many have said they have to take whatever terms the big PBMs offer because they can’t afford to lose so much business.
Early this week, PBM critics thought Trump was firmly on their side.
“The horrible middleman that makes more money, frankly, than the drug companies, and they don’t do anything except they’re a middleman,” USA Today reported Trump as saying Monday. “I don’t know who these middlemen are, but they are rich.”
Trump added, “We’re going to knock out the middleman. We’re going to get drug costs down at levels that nobody has ever seen before.”
That sent stock prices for the conglomerates that own the big three PBMs — UnitedHealth Group, CVS Health and Cigna-Express Scripts — plummeting.
Then came Wednesday’s vague statements about pork by Trump and the two other moguls that could close the government. Republicans came back to the table with a proposal that contained some health measures, but jettisoned the PBM reforms.
“The health care package that we and many of you lobbied members of Congress on this week crashed and burned last night,” the National Community Pharmacists Association said in a Thursday statement to its members. “A total train wreck, caused largely by President-elect Donald Trump’s head of the unofficial Department of Government Efficiency.”
The latter statement was a reference to Musk.
Rep. Greg Landsman, D-Ohio, said the loss of PBM reform was a big loss to Ohioans.
“PBM Reform: 60 million seniors nationwide, 3 million in Ohio, and 135,000 in my district lost out on prescription drug cost savings,” he said on X.
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[1] Url:
https://ohiocapitaljournal.com/2024/12/19/as-trump-tanks-spending-deal-pharmacists-bemoan-possible-loss-of-middleman-reforms/
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