Carter, Lankford Lead Bicameral Push to Bring PBMs to Heel

WASHINGTON — Rep. Earl “Buddy” Carter, R-Ga., led a bipartisan and bicameral group of lawmakers this week in calling for passage of legislation curbing the power and influence of pharmacy benefit managers by the end of this year.

“We are not calling for the passage of any one bill,” Carter, a pharmacist by trade, said during a press conference held outside the Capitol last week.

“What I’m leading is a bipartisan letter to the House and Senate leadership urging them to prioritize PBM reform during the end-of-year negotiations and ensure that the bipartisan efforts we worked on throughout the 118th Congress are enacted into law,” he said.

“Multiple partisan bills have already been advanced in the current Congress that would address specific practices that for too long have increased patient costs and threatened patient access to pharmacies that serve communities nationwide,” Carter said.

“Whether we’re Republican, Democrat or independent, we all want the same thing,” he continued, referring to the large group of shivering colleagues who turned out on a cold Wednesday morning to make their opinions known.

“We want accessible, affordable, quality health care,” Carter said. “The time to act is now.”

Pharmacy benefit managers have long been the object of scorn when discussions turn to the subject of sky-high prescription drug pricing. When they came on the scene in the late 1950s, however, they were seen as an aid to employers navigating the confusing nexus of health care benefits and prescription drug pricing.

Essentially, a pharmacy benefit manager is a third-party that acts as an intermediary among health insurers, pharmacies and drug manufacturers.

PBMs manage prescription drug benefits by negotiating prices, processing claims, and determining patient co-pays, essentially controlling which medications are accessible and at what cost to patients through their insurance plans.

Where things become controversial is when it comes to PBMs’ ability to negotiate rebates. In some cases, these third-parties can lower the cost of medicines by 50% or more.

However, by law, they are also able to retain a portion of rebates and other post-sale price concessions and pass through the remainder to insurers and employers. 

Although this practice helps contain premiums, it incentivizes drug manufacturers to adopt a high-list price, high-rebate strategy, and it encourages PBMs to prefer such drugs. 

As an aside, that’s one reason Carter recently led a bipartisan letter to Attorney General Merrick Garland, calling on the Justice Department to investigate the role of Pharmacy Benefit Managers in the opioid crisis.

Because patients’ cost-sharing is usually based on pre-rebate list prices, a larger spread between list- and post-rebate prices means greater cost-sharing for patients. 

All of this is legal because Congress made it so with the passage of the Medicare and Medicaid Patient and Program Protection Act of 1987.

This law established safe harbor provisions that were used to exempt various arrangements from the anti-kickback statute, including rebates on prescription drugs and other post-sale price concessions. 

These safe harbor provisions were narrowed in 2020, but PBMs can still qualify for the safe harbor as long as their arrangements meet certain requirements.

Carter said the issue is personal to him.

“As a pharmacist, I was the one who had to go to the counter to explain to the patient how much the medication was and then had to watch them make a decision between buying their medication and paying for their groceries,” he said.

“I was the one who had to tell a mother how much the antibiotic was and watch her in tears as she tried to figure out how she was going to pay for that,” he said. “So when I first decided to run for office I said my first goal, my focus, would be on trying to do something about that.”

Carter said he has no doubt that there are patients in every single congressional district who have been denied life saving medication “for no other reason than that PBMs caused the prices to increase and put the medication out of their reach.”

Sen. James Lankford, R-Okla., who is leading the effort to push back at PBMs in the U.S. Senate, also believes Congress needs to take up bipartisan and bicameral legislation dealing with pharmacy benefit managers before the end of the year.

“This has been an issue for years,” he said. “Rural pharmacies in Oklahoma right now are tired of asking the question, ‘Does this get better?’ because right now, we’re losing about one pharmacy a day in America and this situation is impacting all of us.

“The local pharmacy is where you can actually go in and ask questions about your medications. You can’t have those conversations via mail order,” Lankford said. “What PBMs are trying to do is push everyone to mail or to their chosen pharmacist.

“That’s taking business away from the family pharmacy that’s particularly important to rural areas, forcing them to shut down, and limiting the ability for anyone to get a quick answer to their health-related questions and concerns.”

Lankford said “Rural and independent pharmacies across the country are tired of all the clawbacks, tired of the rules changing, tired of the evaluation being different every single order and having to deal with all the chaos that is coming down from all the PBMs.”

“We’ve had common sense legislation pass through committee … it’s ready to go. And yet it has been held up on the floor … We want leadership to take this up and to bring it up in the end of the year package. It’s time to stop holding up legislation that is bipartisan, bicameral and has the potential to solve a problem that Americans need solved,” the senator said.