Iowa Leads in cracking down on PBMs

From the early days of the caucuses through the general election, Iowans make a point to ask tough questions that highlight the inequities that exist in health care, energy, education, agriculture, the list goes on.

We need this tough spirit when it comes to cracking down on the health insurance middlemen who are driving up drug costs.

Pharmacy Benefit Managers — also known as PBMs — are multibillion-dollar companies that determine what Iowans pay for their prescription medications. Three of these companies — CVS Caremark, Express Scripts, and Optum Rx, control more than 80 percent of drug benefits in the United States. And the three top insurers own PBMs that, according to one analysis, accounted for $492.4 billion of revenue in 2022, an increase over 250 percent over a 10-year period.

Fortunately, Sen. Chuck Grassley and several Democratic and Republican members of Congress are fighting back. Rep. Mariannette Miller-Meeks also joined bipartisan colleagues to introduce the Help Ensure Lower Patient (HELP) Copays Act to protect patients from harmful PBM practices.

The Inflation Reduction Act took a few important steps to cap out-of-pocket costs. Seniors on insulin now pay no more than $35 per prescription in Medicare. In 2025, they’ll pay no more than $2,000 out of pocket for Part D-covered medications.

But there’s more that can and should be done. No commissioned study can obscure the fact that one of every four U.S. adults say they have trouble paying for their prescription drugs. In fact, one Iowa resident was charged more than $300 more for a prescription when she retired and was then covered by Medicare. PBM meddling is certainly to blame.

When it comes to PBMs, Congress has the opportunity to cut through the lobbyist and PR firm arguments and get to the real solutions for consumers by:

• Demanding greater transparency in PBM operations so we better understand where the billions of dollars in rebates are going.

• Ensuring that PBMs do not steer consumers to higher-priced drugs. For example, two of the three largest PBMs excluded lower-priced versions of insulin and hepatitis C drugs from their formularies, forcing patients to pay higher costs.

• Ensuring PBMs are only paid a flat fee for their services. This will prevent PBMs from using complicated and confusing contracts that allow them to tack on additional fees for states and employers, driving up consumer costs.

The PBMs are fighting back. Their lobbyists and spokespeople argue they are effectively reducing drug prices and negotiating the best prices they can for their private and public sector clients. They argue, without their services, drug prices would soar.

Iowans won’t be fooled: If the savings these corporate middlemen negotiate are so impressive why are millions still struggling to pay for the medicines? If the PBMs can’t convincingly answer the question of why they pocket savings instead of lowering costs, it’s time for lawmakers to take action and follow Grassley and Miller-Meeks’ lead.

The alternative is to let PBMs continue to play games that help them make billions while charging us whatever they want at the pharmacy counter.

Sally Greenberg is CEO of the National Consumers League.