How Pharmacy Advocacy is Heating Up at the Federal Level

Miguel Rodriguez plays a leading role for American Pharmacies in both legal affairs and legislative advocacy. He has been a major contributor to pro-pharmacy bills passed in Texas, New Mexico, Arizona, and Michigan, and has testified before Congress, the Federal Trade Commission (FTC), and legislatures in several states.

Retail pharmacies are increasingly pressing the urgency of federal reforms to bring relief from abusive practices by pharmacy benefit managers (PBMs). Vertical integration has given the “Big Three” PBMs—CVS Caremark, Express Scripts, and Optum Rx—unprecedented control over pharmacy networks, formularies, and reimbursement. As underwater reimbursements, steering, and other PBM practices drive retail pharmacies out of business at an alarming rate, hopes are pinned on Congress and the FTC for relief at the national level.

Rodriguez pointed out that a sizeable percentage of independent pharmacy patients are insured through federally funded programs, such as Medicare, Medicaid, Tricare, and the Federal Employees Health Benefits Program.

image credit: American Pharmacies

“The most efficient way of fixing all these PBM problems is by doing it through Congress because these are all federal programs,” Rodriguez said.

However, despite growing bipartisan efforts on Capitol Hill, federal reform has failed to materialize, leading independent pharmacists and advocacy groups across the country to focus on state-level reform instead. Though independents would prefer the consistency and national applicability of federal reforms, state legislatures have been a far easier challenge to tackle.

“For years, the reason that it's been at the state level is because there's been inaction at the federal level for so long,” Rodriguez said. “I think everybody would agree that most of the problems that PBMs have caused would be solved most efficiently at the federal level. But unfortunately, there's just been complete inaction—whether it's congressional inaction or the regulators, like the [FTC], or Department of Justice, Department of Labor, Pentagon.”

With underwater reimbursements, steering, and other PBM practices driving retail pharmacies out of business, hopes are pinned on Congress and the FTC for relief at the national level. | image credit: Deanne / stock.adobe.com

Rodriguez cited the Supreme Court’s landmark December 2020 decision in Rutledge vs. PCMA as a major development at the federal level that has triggered a wave of PBM reform legislation in states across the country.

“For decades since ERISA (the Employees Retirement Income Security Act of 1974) was enacted—actually 50 years ago this year—­the courts have said that states cannot touch anything involving ERISA plans. If it’s even remotely connected to an ERISA plan, any state law cannot regulate it. Well, that all changed with this Rutledge decision. The court said that a state can pass a law to reform PBM practices, even when the PBM is processing claims for an ERISA plan. And that has basically been the greenlight for states across the country to go ahead and pass PBM reforms. And so, we’ve seen what had been a trickle of PBM reform laws passed across the states has turned into a flood.”

Rodriguez acknowledges Congress’ longtime inability to pass PBM legislation but said he’s hopeful for the future because of the recent movement of bills within Congress and evidence of true bipartisan support for reforms.

“Over the past 12 to 18 months, we're seeing action that we have never seen before at the federal level, and so this is including Congress. There's been a host of PBM reform bills that have been filed both in the House and the Senate in this current session, which ends at the end of the year,” he said. “We've seen wide bipartisan support for PBM reform. One of the few things in this country that unites Republicans and Democrats is the need for PBM reform. It's just fantastic to see these political enemies coming together on this one issue.”

Rodriguez mentioned the 3 important PBM reform bills currently sitting in Congress and explained how each would play its part in regulating the practices of PBMs, often referred to as opaque and predatory. Those 3 bills include S.3430, the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act of 2023; S.2973, the Modernizing and Ensuring PBM Accountability Act; and H.R.5378, the Lower Costs, More Transparency Act.

Rodriguez said H.R. 5378 is far-reaching legislation that would end some abusive PBM practices while significantly improving pharmacy reimbursement in Medicaid. He pointed out that the bill passed the House and is awaiting Senate approval.

“So now it’s up to the Senate to take action on that bill so we’re hopeful that that can take place by the end of the year.”

While Rodriguez agrees that state-level reform is necessary and is an easier path for pharmacists and advocates in expediting change within their states, the ultimate goal is to see meaningful congressional legislation signed into law.

“A lot of other organizations are out there trying to keep this idea front and center. There's a lot of competing claims for attention to the legislators, but we’ve got to keep that front and center in them, because if those things get passed, I foresee the enforcement to become much quicker than we might see at the state level,” Rodriguez said.

Rodriguez said pharmacist engagement in advocacy is a critical part of getting any significant PBM legislation through Congress. He said pharmacies have to show legislators their value to their patients and communities.

“I encourage anyone who is in this business to go out, call up your state representatives, your federal representation, and just bring them in your store. Show them what you do. They have no idea of how hard these pharmacies are working for their communities and how close they are to their communities. It’s a tremendous eye-opener for them.”