I, like many other Florida political analysts, am gravely concerned about the PBM Transparency Act, a congressional bill that will ostensibly balloon the cost of state patients’ medications if passed.
The bill foolishly takes aim at pharmacy benefit managers (PBMs) — negotiating agents that governments, insurance companies, and employers pay to work on cutting Big Pharma’s prices down.
Figuratively speaking, PBMs are like unions for healthcare purchasers. They use all the clout and muscle they have at the negotiating table to hold the major drug companies’ feet to the fire and prevent them from ballooning Florida’s prescription drug costs to the moon.
Scott Hague with the nonprofit Insure the Uninsured Project understands the benefits that healthcare patients receive from PBMs. He wrote that, “Small and medium businesses, like the ones I work with, don’t have the scale to negotiate lower prices from pharmaceutical companies that are the biggest drivers of increasing prices, accounting for 65 percent of the net cost of every prescription. But PBMs have the clout to take on the drug manufacturers, squeeze their profit margins and get a better deal for patients.”
The Office of Management and Budget told Congress that PBMs are “the primary explanation for why Part D in Medicare is costing a lot less than was projected initially” — because they instigated a “very dramatic shift towards generics and away from branded drugs” to reduce consumers’ drug costs. Congress PBM Transparency Act would make it significantly harder for these companies to continue working to keep drugs affordable for Sunshine State residents.
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According to AARP, nearly three in ten Floridians have already stopped taking prescription medications because of cost concerns. This state’s doctors and nurses know far too many of them on a personal level. They are often tasked with providing moral support to those in the “donut hole” (those with healthcare coverage gaps). They look online for coupons and help them apply for discounted and free medications on drug manufacturer websites. And they know from experience that PBMs save them considerable sums of money.
The Florida congressional delegation knows this, too. In a recent hearing, Florida Rep. Maxwell Frost asked Professor Rena M. Conti, a drug pricing expert, about her thoughts. She responded that she expected regulating PBMs would increase prescription costs.
Why, then, is Congress considering passing this bill?
The drug industry has told members that PBMs aren’t transparent and that they make too much of each consumer’s drug purchase. However, as the Insure the Uninsured Project has noted, industry research points to the drug companies making 65 percent of every prescription dollar spent, while PBMs’ profits fall in the mid-single digits. The drug industry has every self-serving interest to categorize PBMs as the bad actors in the industry that increase costs, but the facts show that the inverse is true — PBMs restrain drug pricing while pharmaceutical companies increase it. My personal experiences demonstrate the same.
To reduce drug costs, Congress should listen to the reform solutions proposed by Florida’s leaders. Sen. Marco Rubio, for example, once introduced the Ensuring Timely Access to Generics Act, legislation that would have reduced prescription costs by stopping major pharma companies from delaying generic drugs from entering the market.
Re-introducing this bill and ones like it will challenge brand-name pharma company’s counterproductive industry monopoly power. Regulating PBMswill do the opposite — it will embolden the top drug companies at Florida patients’ expense. And at this dire time of medication price inflation, that’s a negative consequence that few people in this state can afford to see happen.
Jocelyn Dickman is a former Florida Democratic state committeewoman
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