Urgent Call for Reform: How Pharmacy Benefit Managers Contribute to Prescription Unaffordability and What States Are Doing About It

In the United States, the escalating cost of prescription drugs is forcing many to sacrifice essential medications, despite systems in place meant to safeguard affordable access. A crucial player in this scenario is the pharmacy benefit manager (PBM), whose role in the healthcare system is pivotal yet fraught with critical issues that need immediate address.

PBMs, operating primarily as intermediaries between drug manufacturers and healthcare plans, dictate the availability and price of medications through formularies they control. They negotiate deals with drugmakers and manage pharmacy benefits for various employers and government-initiated health plans like Medicare Part D. Ideally, their function is to leverage lower drug prices through these negotiations.

However, the influence wielded by PBMs in setting drug prices has profound implications on accessibility. A study in 2020 highlighted a harrowing consequence – the inability to afford crucial medications could be linked to over a million deaths. As the cost of vital drugs continues to rise, spurred by the PBM’s pricing strategies, the number of preventable deaths is only expected to grow.

The underlying issue is the lack of transparency within these negotiations and the broader PBM operations. The rebates PBMs negotiate are often not passed on to consumers—instead, these rebates are absorbed, inflating profits while ironically increasing out-of-pocket expenses for patients. This opaque practice points to a deeper problem of prioritizing profits over patient care, particularly when it comes to the choice of medications that PBMs include in their formularies.

In states like Connecticut and New York, legislative efforts have been made to mitigate these disparities. Measures such as capping the price of insulin have provided some relief and highlighted the critical role of state intervention. These steps, however, underscore the necessity for more comprehensive federal oversight to standardize practices across state lines and ensure affordability uniformly.

The compelling necessity for federal action is further illustrated by the price trajectory of insulin. From 1998 to 2019, the price for one vial of Humalog insulin skyrocketed by over 1,000%, making U.S. insulin prices tenfold those in other developed nations. Without decisive federal legislation to enforce cost caps and demand transparency, PBMs can continue to exploit regulatory gaps to their advantage.

A demand for transparency isn’t merely bureaucratic—it’s a critical lever to pull in order to introduce genuine competition that could lead to significantly lower drug prices. Such competition would not only alleviate financial burdens but would fundamentally broaden access to healthcare by making necessary prescriptions affordable for a larger segment of the population.

The reform of PBM transparency regulations is not just beneficial—it is morally imperative. The health and well-being of millions are compromised under the current system, dominated by profit-driven decisions. It’s essential to dismantle these barriers to make healthcare equitable and accessible.

Amidst these systemic issues, the urgency for collective action resonates more than ever. Policymakers, healthcare professionals, and the public must come together to champion policies that ensure drug affordability and uphold the sanctity of human life. As debates continue and solutions are sought, the lives hanging in the balance depend on the swift reform of a flawed system.