The same week, President-elect Donald Trump said he wanted to ‘cut out the middleman’ … [+]
The same week, President-elect Donald Trump said he wanted to “cut out the middleman.” The Republican-led U.S. House of Representatives failed to include pharmacy benefit manager (PBM) reforms in a major government funding bill.
The Republican-controlled House of Representatives removed language from government funding legislation that would increase regulation of PBMs. Such companies, considered middlemen between pharmaceutical companies and consumers when it comes to purchasing drugs, provide drug benefits to employers and government health insurance companies, including Medicaid coverage for poor Americans and Medicare benefits for seniors.
In these roles, PBMs also decide which pharmacists and pharmacies get paid for dispensing prescription medications. And pharmacies have closed across the country in recent years, which their owners blame in part on a lack of reimbursement from the PBMs that pay them.
PBMs have come under fire in recent years as the public, taxpayers and Congress question whether they pass along as much savings as they should to people who buy health insurance. The noise about the coming regulation of PBMs and the companies that own them then got even louder Trump said that earlier this week “we are going to cut out the middleman” regarding these companies.
“The horrible middleman who, quite frankly, makes more money than the drug companies, and does nothing but be a middleman,” Trump said earlier this week. “I don’t know who these middlemen are, but they are rich.”
Included in a so-called “continuing resolution” before it was abolished at the end of this week was a “provision that would require PBMs to reimburse pharmacies at (National Average Drug Acquisition Cost) plus the state reimbursement for the provision of services for all Medicaid managed care programs.” in all 50 states,” the National Community Pharmacists Association, which represents more than 18,900 pharmacies, said. “It would eliminate tiered pricing and pay PBMs a flat administrative fee in all Medicaid managed care programs. This provision will save taxpayers approximately $1 billion over the next decade.”
In addition, the pharmacy lobby said the legislation would have required the Centers for Medicare & Medicaid Services to “establish reasonable and relevant contract terms, including pharmacy reimbursements, in Medicare Part D and create a mechanism for pharmacies to challenge contract violations and penalize PBMs.” ”
But Democrats blamed Republicans and the good relationship they say they have with PBMs and health insurers as the reason the PBM reforms were removed from the legislation. Three of the largest PBMs are owned by UnitedHealth Group, CVS Health and Cigna, which also operate health insurers.
“A CR that includes health care benefits but excludes bipartisan PBM reform is an embarrassing capitulation to the health insurance lobby,” said U.S. Rep. Jake Auchincloss, a Massachusetts Democrat. said in a post on X on Thursday afternoon. “The GOP leadership has just withdrawn from the fight to lower the cost of Rx drugs.”