Lawmakers demand action against pharmacy benefit managers abuses
October 29, 2024 | Judiciary: Senate Committee, Standing Committees - House & Senate, Congressional Hearings Compilation
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In a recent government meeting, lawmakers expressed serious concerns regarding the practices of pharmacy benefit managers (PBMs) and their impact on independent pharmacies and prescription drug prices. Reports from the New York Times highlighted allegations that PBMs are systematically underpaying small independent pharmacies, potentially driving them out of business. This trend has left many Americans, particularly in rural areas, without access to local pharmacies.
Congressman Bill Foster emphasized the need for Congress to investigate these claims, urging a closer examination of PBM practices to prevent anti-competitive behavior that could affect drug accessibility and pricing. He commended the Senate Judiciary Committee for its efforts in addressing these issues.
Representative Raja Krishnamoorthy further elaborated on the detrimental effects of PBMs, describing them as exploitative middlemen that contribute to rising drug prices and the decline of independent pharmacies. He explained that PBMs negotiate drug prices on behalf of health care payers but often fail to pass on rebates to consumers, instead driving up costs. The use of complex reimbursement schemes and retroactive clawbacks has led to significant financial strain on independent pharmacies, with many closing their doors.
Statistics revealed a staggering 107,400% increase in direct and indirect remuneration (DIR) fees over the past decade, exacerbating the crisis. Currently, 73% of counties in Illinois are classified as pharmacy deserts, lacking any pharmacy services. Krishnamoorthy pointed out that the largest PBMs are affiliated with their own pharmacies, which now dispense 80% of prescriptions in the U.S., further consolidating their market power.
Despite these challenges, there is a glimmer of hope as bipartisan support for PBM reform is emerging. Lawmakers are advocating for the passage of the bipartisan Pharmacists Fight Back Act, which aims to address the issues surrounding PBMs comprehensively. The meeting underscored the urgent need for legislative action to protect independent pharmacies and ensure fair pricing for consumers.
Congressman Bill Foster emphasized the need for Congress to investigate these claims, urging a closer examination of PBM practices to prevent anti-competitive behavior that could affect drug accessibility and pricing. He commended the Senate Judiciary Committee for its efforts in addressing these issues.
Representative Raja Krishnamoorthy further elaborated on the detrimental effects of PBMs, describing them as exploitative middlemen that contribute to rising drug prices and the decline of independent pharmacies. He explained that PBMs negotiate drug prices on behalf of health care payers but often fail to pass on rebates to consumers, instead driving up costs. The use of complex reimbursement schemes and retroactive clawbacks has led to significant financial strain on independent pharmacies, with many closing their doors.
Statistics revealed a staggering 107,400% increase in direct and indirect remuneration (DIR) fees over the past decade, exacerbating the crisis. Currently, 73% of counties in Illinois are classified as pharmacy deserts, lacking any pharmacy services. Krishnamoorthy pointed out that the largest PBMs are affiliated with their own pharmacies, which now dispense 80% of prescriptions in the U.S., further consolidating their market power.
Despite these challenges, there is a glimmer of hope as bipartisan support for PBM reform is emerging. Lawmakers are advocating for the passage of the bipartisan Pharmacists Fight Back Act, which aims to address the issues surrounding PBMs comprehensively. The meeting underscored the urgent need for legislative action to protect independent pharmacies and ensure fair pricing for consumers.
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