Editor's note: The story has been updated to correctly reflect the nature of the bill.
Democratic and Republican lawmakers are calling on insurers and pharmacy benefit managers (PBMs) to divest any pharmacies they own in bills introduced to Congress Dec. 11.
While PBM reform has been a widely supported but largely fruitless endeavor so far, mandating insurers sell their pharmacies is one of the most sweeping changes suggested to date.
The mirrored bills were introduced by Senators Elizabeth Warren, D-Massachusetts, and Josh Hawley, R-Missouri and House representatives Jake Auchincloss, D-Massachusetts, and Diana Harshbarger, R-Tennessee.
Auchincloss said the Patients Before Monopolies (PBM) Act implements a critical “firewall” between drug manufacturers and health plans, brokers and sponsors in a LinkedIn post.
Under the bill, insurers would need to sell its pharmacy businesses within three years. If an insurer is found in violation with the act, the Federal Trade Commission, Department of Health and Human Services, the Department of Justice and state attorneys can instruct the health plans to return all revenue earned following the violation. The FTC would then return the revenue to “harmed communities."
“PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business,” said Warren in a statement. “My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen.”
The PBM Act is endorsed by the American Economic Liberties Project, National Community Pharmacists Association and alternative PBM AffirmedRx, among other backers.
“As a life-long pharmacist, I know first-hand how unchecked PBM consolidation and vertical integration have allowed these shadowy middlemen to self-deal and manipulate the system in ways that are driving up drug costs, limiting patient choices, and putting the financial screws to independent community pharmacies,” said Harshbarger. “I’m a proud conservative Republican, but we have antitrust laws for a reason. Federal regulators should never have let this excessive concentration of our healthcare industry happen in the first place, and so it’s up to Congress to get the job done.”
Mail-order and retail pharmacies also apply to this bill and are often distributed by major PBMs.
“A particularly egregious result of the vertical integration of PBM-insurers with retail and mail-order pharmacies is that the PBM—which competes with independent pharmacies and others—decides what their rival pharmacy will be reimbursed and which patients will be allowed to use them,” said Anne Cassity, senior vice president of government affairs for the National Community Pharmacists Association.