Regulating pharmacy benefit managers would pass savings along to consumers

OPINION:

Readers are probably tired of hearing it, but this race for the White House is truly too close to call. Pollster Scott Rasmussen recently framed it well as a sports analogy. “In baseball terms, Trump is winning 1-0 in the sixth inning, but there’s a lot of game left.”

That comparison sounds about right to me. The final score of the proverbial game — which will dictate Washington politics for the next four years — could come down to a whiffed ball or missed catch in the bottom of the ninth.

While fixation on the election outcome isn’t misplaced, members of Congress shouldn’t let it distract them from what’s happening outside the ballpark. Regardless of who wins the White House, policymakers have an opportunity to enact meaningful policy reforms before the end of the year.

Specifically, policymakers can put some points on the board regarding health care reform.

I know what you’re thinking: That’s a nonstarter. Health care policy is a difficult landscape to navigate in Washington, given the overt partisanship in most proposals. Look at the Affordable Care Act. “Obamacare” is still a dirty word to most Republicans a decade after the took effect.

One exception that enjoys bipartisan support, however, is the effort to rehab the drug supply chain. It’s currently dominated by pharmacy benefit managers, known as PBMs, which act as the middlemen between drugmakers and the consumer market.

Although PBMs were initially created to help negotiate lower prescription drug prices, they have field-tested strategies over the years to game the system and consolidate the market. Today, there’s no shortage of ploys practiced by the middlemen that harm patients and independent pharmacies.

A recent headline in The New York Times puts a fine point on the financial migraines PBMs can cause: “FTC Accuses Drug Middlemen of Inflating Insulin Prices.”

And that’s only part of the story. Did you know the net prices of brand-name prescription drugs have fallen every year since 2018? But with PBMs’ funny business, patients don’t see the savings. For them, costs continue to skyrocket.

Several pieces of legislation have been proposed in Congress that would address the behavior of PBM middlemen — many of which have bipartisan support. While it’s a pipe dream to believe the drug supply chain can be completely cleaned up before the new year, getting the ball rolling should be a priority.

For example, one proposal would help to reset moneymaking incentives to benefit Medicare Part D recipients. PBMs make larger profits from more expensive medicines and are therefore motivated to push those products on patients. Delinking the PBM fees from the price of medicine will open the door to more affordable alternatives.

Another would address a kickback scheme. In the current landscape, PBMs are empowered to pocket discounts that are already provided by drugmakers alongside their products. These changes would require the middlemen to share the savings with Medicare recipients for certain products at the pharmacy counter.

Election Day is just around the corner, and the ballpark is packed. Players donning red and blue uniforms attempt to make consequential plays in the final innings. Regardless of the winner, sitting policymakers should remember that they still have a job to do after Nov. 5.

• Jamey Bowers is a partner and owner at Berman and Co.