Reason #1
Protect American competitiveness in biotechnology innovation. More than 2,300 biotechnology companies are based in the U.S., including many working to develop new treatments and cures for patients. However, just three PBMs dominate the prescription drug market, and they control whether patients have access to or can afford lifesaving medicines. According to an FTC investigation, these PBMs engage in practices that stymie both competition and patient access to affordable medicines. Strong PBM reform can help ensure the marketplace for innovative medicines is more competitive for biotech startups and the patients they help.
Reason #2
Fix broken incentives that drive up drug prices for patients. In recent years, the amount of fees PBMs demand more than doubled and profits PBMs collected from a myriad of fees increased by more than 300%. These fees have the perverse effect of raising prices for patients. The reason? PBM fees are usually tied to the price of medicines. The higher the prices, the more money PBMs make. As an investigation by the New York Times revealed, “They steer patients toward pricier drugs, charge steep markups on what would otherwise be inexpensive medicines and extract billions of dollars in hidden fees.” Strong PBM reform can begin to break the link between PBM fees and drug prices.
Reason #3
Ensure savings go to patients – not insurance companies and middlemen. Each year, drug middlemen collect tens of billions of dollars in rebates. These rebates lower what health plans and middlemen pay for medicines, but not patients. Instead, patients often pay full price for medicines, while insurance companies receive significant rebates. Take insulin, for example. Rebates can lower insulin prices by 80% or more, but as the Wall Street Journal reported, “The rebates offer little help because their plans often peg out-of-pocket charges to the drug’s list price.” Strong PBM reform can help ensure these savings go to lower what patients pay at the pharmacy.
