Health care industry middlemen are getting rich by making Georgians pay more for health care. The Federal Trade Commission (FTC) recently released an interim report in its investigation into these bad actors, known as pharmacy benefit managers (PBMs), which found that PBMs are profiting at the expense of patients and independent pharmacies. It’s time for state and federal legislators and regulators to bust this anticompetitive industry up.
When I opened my first retail pharmacy in Pooler, Ga., PBMs were nothing more than paper processors, filing claims on behalf of their clients. Today, the three biggest PBMs determine if patients can get the care they need, where patients can fill their prescriptions and how much that prescription will cost.
Credit: Handout
Credit: Handout
I’m not opposed to anyone making money. Georgia is the No. 1 state in the nation to do business, a status I am proud to remind people of when I’m in Washington, D.C. Honest companies make money by providing value to their clients, which pay a fair price for the good and services they receive. PBMs claim that they provide value to patients by negotiating lower prices on their behalf; however, the opposite is true.
Over the past decade, prescription drug costs have grown by 40%. In that same period of time, UnitedHealth, Cigna and CVS/Aetna, which control 80% of all prescriptions filled in the United States, saw a 250% increase in their combined earnings. When faced with this clear contradiction, PBMs pass the blame onto the drug manufacturers. There’s no question that drug manufacturers need to do a better job with pricing; but at least they’re putting money back into research and development for lifesaving cures. PBMs don’t, and they provide no other value to patients or providers that justifies billions of dollars in revenue.
The cancer drug Gleevec is an example of PBMs’ bad practices in action. The drug went generic in 2016 and can be bought today for as little as $55 a month. But CVS Health and Cigna can charge $6,600 a month or more for Gleevec prescriptions — forcing cancer patients to ration or even skip doses.
Credit: Courtesy Buddy Carter
Credit: Courtesy Buddy Carter
These predatory pricing tactics are threatening Georgians’ lives. Mattie from Moreland, Ga., has a very rare genetic disorder called spinal variant neurofibromatosis type 1 (NF1), which causes tumors on every single level of his spinal cord and his chest wall. Recently, Mattie’s health had improved to the point at which he was able to return home after a long stay in the pediatric hospital. However, at the end of May, CVS Caremark denied Mattie access to a lifesaving drug he had been on for two years, and he almost died as a result. Now, he’s back at the hospital for the foreseeable future.
PBMs didn’t want to pay for Mattie’s necessary medication, and the rest of his life could be impacted because of it.
PBMs also make it harder for patients to access health care services by putting independent pharmacies out of business. Between 2013 and 2022, about 10% of independent retail pharmacies in rural America closed. PBMs are forcing many of these closures by paying pharmacies that they own higher reimbursements than they’re paying to independent pharmacies. In one case, chain pharmacies received 2,000% more than independent pharmacies for dispensing the cholesterol-lowering drug atorvastatin. That’s not good business; that’s theft.
The FTC came to a similar conclusion in its interim report, finding that vertical integration has given PBMs significant power to steer patients toward pharmacies they own, negotiate unfair contract terms with independent pharmacies and limit access to generic or lower-cost drugs by excluding them from their list of covered medications, or formulary. The FTC is right, and it’s getting worse by the day. In 2023, we lost roughly 300 independent pharmacies in the United States. In 2024, we are on track to lose more than one pharmacy per day. This leads to pharmacy deserts, especially in rural areas, and further health care consolidation, eroding the quality, accessibility and affordability of health care.
A few months ago, during an Energy and Commerce Committee member meeting with the Congressional Budget Office, I asked Director Phillip Swagel to give me one example of health care consolidation leading to lower prices for patients. Neither he nor any of his 20 staff members present could give me an example. In fact, I have yet to see a single example, and that’s because it doesn’t exist. Health care consolidation harms patients — and PBMs are the worst offenders.
It’s time to bust up the pharmacy benefit mafia for good.
Buddy Carter, a Republican, represents coastal Georgia in the U.S. House of Representatives.
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