Q&A: Douglas Hoey on PBM Reform, Optum Rx Cost-Plus Announcement | AAP 2025
At AAP 2025, Douglas Hoey, CEO of NCPA, discussed the possibility of PBM reform under the new administration and his take on Optum Rx’s plans to introduce a cost-plus reimbursement model.
Despite repeated promises, Congress has continued to delay pharmacy benefit manager (PBM) reform, leaving independent pharmacies in crisis. With a new administration in the White House that has signaled support for PBM reform, there is renewed hope for change. However, Douglas Hoey, RPh, MBA, CEO of the National Community Pharmacists Association (NCPA), warns that while there is optimism, patience is wearing thin—the time for meaningful reform is now.
Q&A: Douglas Hoey on PBM Reform, Optum Rx Cost-Plus Announcement | AAP 2025 / doidam10 - stock.adobe.com
Drug Topics® sat down with Hoey at the American Associated Pharmacies (AAP) Annual Conference, held April 10 to 12 in Austin, Texas, to discuss if he is hopeful that PBM reform will be passed under the new administration, what needs to be done to get PBM reform passed, and his take on Optum Rx’s announcement that it plans to introduce a cost-plus prescription reimbursement model.
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Drug Topics: Despite bipartisan support, PBM reform continues to be brushed aside. Are you at all hopeful that some type of PBM reform will be passed under the new administration? What do you think needs to be done to get PBM reform passed?
Douglas Hoey, RPh, MBA: I'm extremely optimistic, if for no other reason that it saves over $5 billion for taxpayers. As far as it being delayed and delayed and delayed, we've said to members of Congress, “Look, we've been the bridesmaid left at the altar three different times with continuing resolutions that were passed to fund the government and pharmacy not being included.” They continue to assure us that PBM reform will be included. The latest that we've been told by the leadership of Congress is that it will be done through the reconciliation process, so as the budgets are reconciled between the Senate and the House, PBM reform will be included in that. That does make some sense, because they're going to need some ways to save money. And again, PBM reform saves $5 billion, so it should be attractive for that. We are beyond impatient, though, and in fact, our fly in is coming up, and the message is, “When are you going to get this done?” I mean, we want to be polite to a certain extent, but we're almost beyond politeness because it hasn't been done. Pharmacies are closing. Patients are suffering. Prices are going up. And Congress continues to sit on its hands. Am I optimistic? Yes. Am I done waiting? Yes.
As far as things that need to be done, continued pressure on members of Congress. I mean, really make your representatives tell you why it can't be done. And if they say, “Well, leadership hasn't put it up for a vote,” ask them why. They have a vote. I don't want to hear, “I'm a helpless member of Congress.” No, you're a member of Congress. You have a vote. You can talk to leadership about why it hasn't come up for a vote. We personally talked to Speaker Johnson, and he has said it will go through. He is in favor of it, and he supports it. That's great. We appreciate that. Now do it. So, that continued pressure from pharmacists and when they can, engage their patients. I think it's good for the members of Congress to hear it not only from pharmacists, not only from small business owners, not only from their constituents, but also other constituents that can vote them in or out of office.
Drug Topics: What’s your take on Optum Rx’s recent announcement that it plans to introduce a cost-plus prescription reimbursement model?
Hoey: Optum Rx came out and said that they want to pay pharmacies.1 They understand that pharmacies are losing money on brand drugs, and they want to smooth that out so that pharmacies no longer lose money on all or most brand drugs. However, instead of increasing the size of the pie, they're just cutting it up differently. What they are proposing is that pharmacies would make less on generics and basically break even, or maybe not lose money, on brands. I guess two reactions. One, if you're just shuffling the chairs on the deck of the Titanic, that doesn't really help. Two, if I'm trying to look at this in the most optimistic fashion, it's at least trying to do something different. As we've talked to them, they are talking to PSAOs. And as we've talked to the PSAOs—NCPA does not negotiate any contracts—but the PSAOs do. The PSAOs are trying, or at least the PSAOs that Optum Rx is talking to, are trying to increase the size of the pie. If the pie actually gets bigger, if there is more dollars going to pharmacies, then I think the effort is actually good. They're at least trying to do something different, unlike their two competitors. So, largely skepticism. Actions will speak louder than words, is what we told Optum Rx when they told us about it. If it does change the pharmacy payment model, which is NCPAs mission, change the pharmacy payment model so that pharmacies are paid, not losing money on brands, and paid fairly on generics. If it became that which it's that's not what's being proposed, it could be a good thing. But for now, it's like I said, just shuffling the chairs on the Titanic, it's just moving money around. Same results for pharmacies.
A cynical view could also say that pharmacy abandonment, which is when the pharmacy says, “I can't fill this brand drug because I'm losing too much money on it,” which we're hearing about increasingly. A cynical view would say maybe that's motivating OptumRx, because maybe they're making less money in rebates and fees from brands because the brands aren't getting filled, Maybe they're hearing from brand manufacturers that they're not going to pay the fees that Optum Rx is extorting from them. Maybe they have a less benevolent motivation. As long as they pay the pharmacies fairly and increase the size of the pie, their motivation doesn't matter as much to me. The bottom line is, what they've proposed, unless it increases the reimbursement pie for pharmacy, same old, same old.
I think, like the CVS thing was, to me, clearly, in response to the Mark Cuban Cost Plus model. Cost plus is something that NCPA has advocated for for years. Cuban’s large megaphone, he's got, I don't know, several million followers on X. I think that catalyzed some of CVS’ move to a cost plus model. I think some of it's the pressure. All three of the PBMs, especially Express Scripts, are trying to do a lot of smoke and mirrors to convince Congress that there's nothing to see—everything's okay with independent pharmacies. We've solved it through the Marketplace, which is the way everyone would like to solve the problems between PBMs and pharmacies. We need legislation, because the marketplace is so tilted, it's so one sided in the PBMs favor that, unfortunately, the marketplace doesn't work anymore. I think the cost plus from CVS, Express Scripts is also trying to do cost plus, and this from Optum Rx, some of that, and maybe a lot of it, is to try to dissuade Congress and the FTC from continuing to look at things. NCPA’s message has been very clear. Actions speak louder than words and actions have not happened yet that change anything. We still need PBM reform legislation passed.
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