Breaking the PBM Monopoly: Actionable Steps

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According to an FTC report, PBMs are central to the complex pharmaceutical distribution chain that delivers medicines from manufacturers to patients. PBMs serve as middlemen, negotiating the terms and conditions for prescription access. Those who work in the industry know this, but the critical question is, “What’s going to be done about it?”

The three largest PBMs now manage nearly 80 percent of all prescriptions in the United States. They are also vertically integrated, serving as health plans and pharmacists and playing other roles in the drug supply chain. As a result, they wield enormous power and influence over patients’ access to drugs and the prices they pay. This can have dire consequences for Americans, with nearly three in ten surveyed Americans skipping doses of their prescribed medicines due to high costs.

Here’s what the healthcare community can do to help break up PBMs’ pricing control and promote a more equitable system.

1. Advocate for Legislative Change

Legislative reform is one of the most effective ways to challenge PBMs’ control. Healthcare professionals can:

  • Support Transparency Laws: Advocate for laws requiring PBMs to disclose rebate amounts and the percentage of these savings passed on to patients.
  • Push for Anti-Kickback Regulations: Support regulations prohibiting PBMs from receiving kickbacks from drug manufacturers.
  • Encourage the Creation of Alternative Models: Promote the development of public or nonprofit PBMs to provide competition and transparency.

2. Educate Patients and Policymakers

Awareness is a powerful tool. Healthcare professionals should:

  • Inform Patients: Educate patients about the role of PBMs and how their practices affect drug prices. Empower patients to ask questions about the costs and demand transparency.
  • Engage with Policymakers: Share expertise and real-world examples with legislators to illustrate the impact of PBMs on drug pricing and patient care.

3. Collaborate with Other Healthcare Stakeholders

Working together with other stakeholders can amplify the push for change:

  • Form Alliances: Join physician groups, pharmacists, and patient advocacy organizations to present a united front against PBM practices.
  • Host Forums and Discussions: Organize events to discuss the issues surrounding PBMs and develop collective strategies to address them.

4. Promote Value-Based Contracting

Encouraging the adoption of value-based contracting can help shift the focus from volume to value:

  • Focus on Outcomes: Negotiate contracts that tie payments to patient outcomes rather than the volume of drugs sold.
  • Align Incentives: Ensure that insurers, manufacturers, and healthcare providers have aligned incentives to prioritize patient health over profits.

5. Leverage Technology and Data

Utilizing technology and data can enhance transparency and efficiency:

  • Implement Electronic Health Records (EHRs): EHRs are used to track drug prices and outcomes, clearly showing how PBM practices impact patient care.
  • Utilize Price Comparison Tools: Promote digital tools that allow patients and providers to compare drug prices and identify the most cost-effective options.

6. Advocate for Direct-to-Employer Contracts

Encouraging employers to bypass PBMs and contract directly with pharmaceutical companies can reduce costs:

  • Highlight Benefits: Educate employers on the potential savings and increased transparency of direct contracting.
  • Provide Resources: Offer guidance and resources to help employers navigate establishing direct contracts.

7. Support Research and Innovation

Investing in research can provide the data needed to drive change:

  • Fund Studies: Support research into the impact of PBMs on drug pricing and patient outcomes.
  • Share Findings: Disseminate research findings widely to inform policy decisions and public opinion.

Breaking up the PBM monopoly on drug pricing is a complex challenge but not insurmountable. By advocating for legislative change, educating patients and policymakers, collaborating with other stakeholders, promoting value-based contracting, leveraging technology, advocating for direct-to-employer contracts, and supporting research, the healthcare community can take significant steps toward a more transparent and equitable pharmaceutical pricing system. Together, we can ensure that patients receive their medications at fair and affordable prices.