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PBM Accountability Project, Pharmacists United for Truth & Transparency, and Nearly 50 Other Stakeholder Organizations Urge Congress to Pass PBM Reforms

Nov 28, 2023

"The predatory impact of PBM practices is extensively documented in the public record. And it is felt every day at pharmacy counters by millions of Americans who cannot afford their medicines. The time to deliver real results is now."

November 28, 2023

Representative Cathy McMorris Rodgers
Chair, Committee on Energy and Commerce
2188 Rayburn House Office Building
Washington, DC 20515

Representative Frank Pallone
Ranking Member, Committee on Energy and Commerce
2107 Rayburn House Office Building
Washington, DC 20515

Cc: House Energy and Commerce Committee Membership

Re: Must-Pass PBM Reform Legislation

During the 118th Congress, multiple bills have been introduced and acted upon by committees in both
chambers that would improve our nation’s broken prescription drug system and result in cost savings to
patients and prescription drug plans. All advance a common goal of reining in the profiteering, anticompetitive and anti-consumer practices of pharmacy benefit managers (PBMs), creating price
transparency, making prescription medicines more affordable for patients, and bringing genuine savings
to employers and taxpayers. On behalf of nearly 50 patient, provider, pharmacy, consumer, organized
labor and antitrust advocates, we are now urging expedited action to enact meaningful PBM reform. In
short, it’s time to deliver the right legislation so that Americans can better afford the medicines they
need at the pharmacy counter.

Predatory PBM business practices have become well documented in Senate and House hearings. Three
major corporations control more than 80% of U.S. prescription drug sales and they have used their
domination of the marketplace to eliminate competition and create vertically-integrated empires that
include mail order, specialty and retail pharmacies, and offshore group purchasing organizations that
evade taxation and scrutiny by U.S. regulators. The original mission of PBMs – to use their volume
purchasing to negotiate lower prices for their clients and consumers – has been replaced by a cynical
system of arbitrage in which PBM profits soar continually higher, while working Americans see out-ofpocket costs rising for the medicines they need and employers struggle to cover escalating costs of
health benefits for their employees.

Americans cannot, and should not, wait longer to resolve these problems. Each day without
comprehensive, effective legislative action is a day in which more savings are being siphoned from
taxpayers, consumers and employers to be funneled into PBM profits. Through a complex web of
opaque arbitrage schemes, PBM-derived drug revenues have transformed these middlemen companies
into some of the most profitable corporations in the world, in many cases taking a larger share of
prescription drug revenues than the research and manufacturing companies that create the products.
Growing costs of healthcare hurt Americans at home, and hurt American companies’ global
competitiveness. Legislative inaction or enactment of weak legislation will only extend the financial
insecurity of working Americans, while the competitive advantage of American businesses erodes in the
global marketplace.

As both houses of Congress advance legislation to restore dynamic and transparent competition to the
PBM-intermediated prescription drug marketplace, we believe enactment of two key provisions is
critical to achieving the bipartisan goal of lowering prescription drug costs that Congress has pursued for
many years:

• Break the link between PBM income and drug prices in the private marketplace and in the
Medicare program.

PBMs negotiate rebates and discounts from prescription drug manufacturers and then offer preferred
placement on formularies to those drugs that provide PBMs the greatest sources of income from
retained rebates and discounts, extracted fees and other revenue extraction schemes. A complex set of
perverse incentives in this highly uncompetitive drug marketplace motivates PBMs to steer consumers
to higher-priced drugs, rather than to less expensive generics and biosimilars, as would occur in an
authentically competitive market. It is especially unconscionable for Medicare beneficiaries – Americans
who face mounting health challenges in the autumn of their lives after a lifetime of work – to face higher
out-of-pocket costs and be denied access to medicines they need due to predatory pricing tactics of a
few anti-competitive PBM oligopolists who dominate the prescription drug marketplace. Congressional
legislation must prohibit PBMs from deriving income from any source other than transparent, market determined fees paid by PBM clients for services they value. It is long overdue for Congress to take this
decisive step to prohibit cost-increasing and anti-competitive PBM arbitrage schemes and replace them
with a genuine competitive market for bona fide PBM services.

• Americans with chronic diseases should directly benefit from the savings PBMs negotiate with
drug manufacturers.

We have a chronic disease crisis in this country. Chronic illnesses are reducing life-years more than twice
as much as overdoses, suicides, homicides and car accidents combined. When out-of-pocket
prescription drug costs are too high, patient adherence to physician-prescribed medications is
diminished and patients become sicker and generate greater costs for our health care system. Passing
savings on to chronic disease patients makes sense for our population health and our economy. Yet
today, when PBMs negotiate discounts from drug manufacturers, there are no incentives for them to
pass these savings on to their plan sponsor clients or their patients. And the health of chronically ill
patients and our economy suffer because of it.

Taking Action

The public wants Congress to act on these matters. A recent poll found that more than 80% of likely
voters support breaking the link between PBM income and prescription drug prices. And Americans
have consistently said that PBM-negotiated savings should be used to make drugs more affordable for
consumers. At a time in which Americans are divided on so many political and policy issues, there is
bipartisan agreement on the matter of PBM reform.

Congress has devoted considerable time to examining these issues. Members have pored over
pharmacy data and heard many hours of expert testimony. The predatory impact of PBM practices is
extensively documented in the public record. And it is felt every day at pharmacy counters by millions of
Americans who cannot afford their medicines. The time to deliver real results is now. We encourage
immediate action to enact effective PBM reform, and we thank you for your leadership.


PBM Accountability Project
A. Philip Randolph Institute
Alliance for Transparent and Affordable Prescriptions (ATAP)
American Pharmacists Association (APhA)
American Pharmacy Cooperative, Inc.
America's Agenda
Autoimmune Association
Black, Gifted & Whole Foundation
Boone County Hospital
Carilion Clinic
Chronic Care Policy Alliance
Coalition of State Rheumatology Organizations
Coalition to Protect Patient Choice
Colorado WINS Local 1876
Crohn's & Colitis Foundation
Healthy Men Inc.
HIV + Hepatitis Policy Institute
Immune Deficiency Foundation
Infusion Access Foundation
International Foundation for Autoimmune & Autoinflammatory Arthritis (AiArthritis)
International Union of Bricklayers & Allied Craftworkers (BAC)
International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers
Ironworkers District Council of the Mid-Atlantic States
Iowa Pharmacy Association
Job Creators Network
Let My Doctors Decide
Lupus and Allied Diseases Association, Inc.
MidWest Rheumatology Association
Multiple Sclerosis Foundation
National Community Pharmacists Association
National Consumers League
National Grange
National Infusion Center Association (NICA)
Neuropathy Action Foundation
North Carolina Rheumatology Organization
Partnership to Fight Chronic Disease
Pharmacists United for Truth and Transparency
South Carolina Pharmacy Association
Sunvalley Arthritis Center
Tennessee Rheumatology Society
Trade Alliance to Promote Prosperity
United Food & Commercial Workers (UFCW)
UFCW 8-Golden State
United Mineworkers of America (UMWA)
Virginia Society of Rheumatology
Wisconsin Rheumatology Association

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