Patients Before Monopolies Act to End Conflicts of Interest Between Pharmacies, PBMs
US Senators introduced the bipartisan bill addressing pharmacy benefit managers and their affiliated pharmacies.
In a bipartisan move to continue the scrutiny of pharmacy benefit managers (PBMs) in Congress, Senators Elizabeth Warren (D, Massachusetts) and Josh Hawley (R, Missouri) introduced legislation that would prohibit corporations’ collective ownership of both PBMs and pharmacies. According to a news release, the aptly named “Patients Before Monopolies” Act was designed to limit the conflicts of interest that are negatively impacting patients and independent pharmacies alike.1
“PBMs have manipulated the market to enrich themselves—hiking up drug costs, cheating employers, and driving small pharmacies out of business. My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen,” said Senator Warren.
The Patients Before Monopolies Act has bipartisan support from democratic Senator Elizabeth Warren and republican Senator Josh Hawley. | image credit: Jennifer / stock.adobe.com
Introduction of the Patients Before Monopolies Act comes at a time of great disapproval towards PBMs for a myriad of unfavorable business practices. Indeed, in the 118th Congress alone, this legislation joins 3 other PBM-related bills intended to thwart their noticeable control of the market. The other 3 notable bills include the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act of 2023 (S.3430); Modernizing and Ensuring PBM Accountability Act (S.2973); and Pharmacy Benefit Manager Transparency Act of 2023 (S.127).
While previously introduced bills focused on specific PBM tactics, such as spread-pricing or opaque contracting, the Patients Before Monopolies Act is attempting to go after the larger corporations that control PBMs and pharmacies together. Aiming to totally separate PBMs from big-chain pharmacies, the Patients Before Monopolies Act has major implications for some of the largest health care conglomerates in the US.
READ MORE: Independent Pharmacist on Navigating the Dynamic Pharmacy Profession
One of the key provisions of this new legislation is that it will strictly prohibit any PBM or insurance company from owning any type of pharmacy business. If signed into law, companies that do own pharmacy businesses will be required to divest from the operation within 3 years’ time.
The act also gives power to some key government parties—the Federal Trade Commission (FTC), Department of Health and Human Services, Antitrust Division of the Department of Justice, and state attorneys general—to enforce its actions. For parties that violate this legislation, the FTC will be appointed to redistribute any revenue made during violation to communities that have been harmed by the companies abusing conflicts of interest. Finally, the law clearly outlines further that the FTC is the enforcing party, ensuring the prohibition of PBM-pharmacy conflicts of interest and that all violators are held accountable.
One of the most notable corporations that would be impacted by the Patients Before Monopolies Act is CVS and its affiliated PBM known as Caremark. According to recent American Medical Association (AMA) data, CVS currently holds the largest market share among any other PBM at 21.3%.2
However, CVS is not alone at the top of the pharmacy benefits market, with OptumRx (owned by UnitedHealth Group) at 20.8% of market share, Express Scripts (owned by Cigna) at 17.1%, and Prime Therapeutics (owned by Blue Cross Blue Shield) at 10.3%.
“The insurance monopolies are ruining American health care. Patients and independent pharmacies are paying the price. This legislation will stop the insurance companies and PBMs from gobbling up even more of American health care and charging American families more and more for less,” said Senator Hawley.
Joining previous PBM-centric legislation introduced in this congressional session, the Patients Before Monopolies Act is looking to disrupt the ongoing vertical integration of some of the country’s largest corporations. This is great news for smaller pharmacies at the independent or community level looking to reclaim the business larger-chain pharmacies have gradually swallowed up in the past few decades.
However, like the 3 bills introduced previously, this legislation must be signed before the status quo in the pharmacy industry begins to change. And while federal-level legislation continues to go unsigned, community pharmacies and patients alike must put their faith in the legislators fighting to reclaim lost businesses and access to care.
“Giant PBMs and insurers owning their own pharmacies [have] driven independent pharmacies out of business and reduced patient access to quality care. The Patients Before Monopolies Act addresses the root cause of this problem—consolidated market power—by eliminating the inherent conflicts of interest within the big 3 PBM business model,” concluded Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. “We are thrilled to see Senator Warren and Senator Hawley lead this bipartisan effort to lower drug costs, protect independent retail pharmacies, and improve patient access to care.”
READ MORE: Minority Communities, Independent Storefronts Hit Hardest by Pharmacy Closures
Pharmacy practice is always changing. Stay ahead of the curve: Sign up for our free Drug Topics newsletter and get the latest drug information, industry trends, and patient care tips, straight to your inbox.
