Transparency-Rx, a not-for-profit coalition led by transparent pharmacy benefit managers (PBMs), today released the below statement following the House Oversight Committee’s markup of H.R. 6283 and inclusion of the Delinking Revenue from Unfair Gouging Act (DRUG Act):
“We applaud the continued bipartisan leadership in the U.S. House of Representatives and the House Oversight Committee in tackling one of the most egregious practices from Big PBMs today. By taking concrete steps to advance ‘de-linking,’ especially in commercial markets, the DRUG Act addresses head on the perverse incentives that tie rebates to the list price of prescription drugs, a practice that inflates costs for patients and employers and destabilizes local job creators and communities,” said Transparency-Rx Managing Director Joe Shields.
Under traditional PBM models, profits and fees are tied to the prices of medications, a practice that harms patients and distorts the health care system. A recent report from Nephron Research underscores the magnitude of this issue, revealing that PBM compensation from fees linked to drug prices doubled in the commercial market between 2018 and 2022 to a staggering $7.6 billion. This profit-driven approach steers patients away from more affordable generic drugs, putting financial strain on individuals and exacerbating the broader issue of skyrocketing health care costs.
A second study showed delinking PBM compensation from the list prices of prescription drugs could have substantial impacts on U.S. prescription drug spending—estimating a total savings range from $39.9 billion to $273.6 billion over 10 years.
Shields added “Policymakers are uncovering that big PBMs employ an antiquated, nefarious, and linked approach, that locks in patients, consumers, and employees into indefensible, high-cost drugs. This allows insurers and big PBMs to game premiums and drug spend, and ultimately undercuts improved outcomes and medication adherence for hard-working Americans. This is especially true for critical drug treatments, shown to bridge gaps in health pricing disparities in both rural and especially communities of color. Without delinking, patients come second to PBM profits.”
According to data published by Transparency-Rx, under traditional PBM pricing, drugs for common conditions such as oral-beta blockers for high blood pressure, for type 2 diabetes, and cholesterol are anywhere, on average, 163% to 195% more expensive under a linked approach, big PBM approach, vs. a transparent one.
“Transparent PBMs have embraced and championed these reforms with local companies, and already demonstrated a track record of reducing employers’ health care costs by 15-20% on average – a meaningful step in reversing the country’s drug affordability crisis. We remain optimistic and strongly supportive of further and more comprehensive Congressional action in the House and Senate – including de-linking and transparency in the commercial sector, so patients and employers are protected from the flawed and costly approaches of big PBMs.”
To view Transparency-Rx’s letter to the House Oversight Committee, click here.