President-elect Donald Trump sets sights on Pharmacy Benefit Managers to slash drug costs, sparking a healthcare reform showdown.
At a Glance
- Trump plans to target Pharmacy Benefit Managers (PBMs) to reduce drug costs
- Three major PBMs control 80% of the market, affecting over 270 million Americans
- The Modernizing and Ensuring PBM Accountability Act aims to reform PBM incentives
- Trump’s initiative faces potential pushback from the Biden administration
Trump Takes Aim at ‘Middlemen’ in Drug Pricing
President-elect Donald Trump has announced a bold initiative to reform healthcare by targeting Pharmacy Benefit Managers (PBMs), whom he criticizes as unnecessary middlemen inflating drug prices. This move is part of a broader strategy to reduce prescription costs for Americans, particularly seniors. Trump’s plan involves incorporating these reforms into upcoming government financial strategies, signaling a significant push for transparency and fairness in drug pricing.
The initiative has gained support from Americans for Limited Government and over 20 conservative groups, highlighting the growing concern over PBMs’ role in the healthcare system. With three major PBMs – CVS Caremark, Express Scripts, and OptumRx – controlling 80% of the market and affecting over 270 million Americans, the impact of this reform could be far-reaching.
“The horrible middleman that makes more money, frankly, than the drug companies, and they don’t do anything except they’re a middleman. We’re going to knock out the middleman.” – President Trump
The Role of PBMs in Drug Pricing
PBMs have come under scrutiny for their alleged role in inflating drug prices. These organizations, which act as intermediaries between drug manufacturers, pharmacies, and insurance companies, are accused of promoting more expensive drugs and controlling formularies to maximize their profits rather than prioritizing patient care and cost-effectiveness.
Kevin Duane, a pharmacist who testified on the matter, provided insight into the PBMs’ influence: “Patients and their doctors have virtually no say in what drugs are used, since the PBM essentially forces which drugs can be used – not because a drug is better or worse, but because the PBM can make more money from it.” – Source
This testimony underscores the concerns about PBMs’ impact on patient care and drug affordability, fueling the push for reform.
The Modernizing and Ensuring PBM Accountability Act
At the heart of Trump’s initiative is the Modernizing and Ensuring PBM Accountability Act (S. 2973). This proposed legislation aims to reform PBM incentives and decouple their fees from drug prices, potentially leading to significant cost reductions for seniors and other patients. The bill has garnered bipartisan support, with lawmakers urging its passage before Christmas to advance Trump’s healthcare agenda.
Trump’s team, including potential Health and Human Services nominee Robert F. Kennedy, Jr. and CMS nominee Dr. Mehmet Oz, have been actively discussing PBM reforms. House Speaker Johnson is expected to begin efforts to eliminate PBM middlemen, potentially including measures in an upcoming spending bill.
“These middlemen are, but they are rich as we’re going to knock out the middlemen. We’re going to get drug costs down at levels that nobody has ever seen before, and that really, I tell you, we spend more time talking about that with Bobby and with the executives and Oz, all of them. We spent more time talking about that than anything else.” – President Trump
Challenges and Opposition
Despite the momentum behind this initiative, it faces potential challenges. The Biden administration previously repealed a Trump-era policy known as the Trump Rebate Rule, which aimed to pass drug manufacturer rebates directly to seniors. This policy was estimated to save seniors billions by redirecting discounts from PBMs to patients.
The pharmaceutical industry and PBMs themselves are likely to resist these reforms, given the significant financial implications. However, the bipartisan nature of the concern over drug pricing and the role of PBMs suggests that there may be room for compromise and progress on this issue.
As the debate over healthcare reform continues, the focus on PBMs represents a significant shift in approach to addressing drug costs. The success of this initiative could have far-reaching implications for the healthcare industry and, more importantly, for millions of Americans struggling with high prescription drug prices.
Sources:
- Trump Takes on Pharmacy Benefit Managers: ‘We’re Going to Knock Out the Middleman’
- How the US Election May Affect Drug Pricing, Medicare, and Medicaid Programs – Key Areas to Watch
