NorthJersey.Com: The clock is ticking on a lame duck Congress. Pharmacy benefit manager reform is essential

By Jeanette Hoffman, Patients Come First New Jersey’s Executive Director

Now that the election is over and Congress is in its lame duck session, one of the most pressing issues is reforming the abusive PBM industry. PBMs — or pharmacy benefit managers — are the middlemen in the prescription drug pipeline and have been charged with manipulating the market and inflating the cost of medicines for patients.

In fact, the Federal Trade Commission recently initiated a lawsuit against the top three PBMs — CVS Health's Caremark Rx, Cigna's Express Scripts and UnitedHealth Group's OptumRx — saying these companies created a "perverse drug rebate system" that artificially inflates the cost of insulin. 

The FTC charges that the three PBMs, which control 80% of all prescriptions in the United States, have abused their power by rigging the pharmaceutical supply chain for their own profit at the expense of patients. The PBMs are charged with incentivizing manufacturers to inflate insulin list prices, restricting patients’ access to more affordable insulins on drug formularies, and shifting the cost of high list price insulins to vulnerable patient populations.

Due to these exploitative rebating practices, patients suffered from skyrocketing prices of lifesaving drugs, such as insulin. For example, according to the FTC’s lawsuit, in 1999, the average list price of a brand-name insulin, Humalog, was only $21. Less than 20 years later, in 2017, it increased to more than $274, a staggering increase of more than 1,200%.

As a result of these astronomical price increases imposed by PBMs, Americans with diabetes are rationing their medication and jeopardizing their health. In 2019, one in four diabetes patients was unable to afford insulin, according to the FTC. And some patients have even died because they couldn’t access affordable treatment.

The complaint charges that, even when lower list-price insulins became available that could have been more affordable for vulnerable patients, the PBMs systemically excluded them in favor of high list-price, highly-rebated insulin products.

Shockingly, these PBMs collected billions of dollars in rebates and fees while insulin became increasingly unaffordable. 

Clearly, our lawmakers and regulators have a responsibility to crack down on these unfair and abusive practices. The FTC’s lawsuit is not the first, and voters recognize the need to reform this industry.

Read the full op-ed in NorthJersey.com.