Senate bill proposes to rein in PBMs by forcing them to sell pharmacy businesses

Photo: Mario Tama/Getty Images

A proposed bipartisan, bicameral bill introduced in the Senate would prohibit an insurer or a parent company of a pharmacy benefit manager from owning a pharmacy business.

If passed, big insurers such as CVS Health, which owns Aetna; Cigna; and UnitedHealth Group would be forced to divest of any pharmacy assets.

CVS Health owns the PBM CVS Caremark and also the CVS Pharmacy business.

Having the same ownership of a PBM, which pays for pharmacy services, and a pharmacy chain is an inherent conflict of interest, according to a statement from the office of Sen. Elizabeth Warren, D-Mass., one of four lawmakers who introduced the bill on Wednesday.

With a week left in this year's legislative session, Warren was joined by Josh Hawley, R-Mo., and Representatives Diana Harshbarger, R-Tenn., and Jake Auchincloss, D-Mass., Wednesday in introducing the Patients Before Monopolies Act.

WHY THIS MATTERS

This is the latest effort by Congress to rein in PBMs and break up what lawmakers have called their control over the prescription drug market.

Joint ownership of pharmacies and PBMs is a "gross conflict of interest that enables these companies to enrich themselves at the expense of patients and independent pharmacies," Warren said in a released statement.

The Patients Before Monopolies Act would:

• Prohibit a parent company of a PBM or an insurer from owning a pharmacy business.
• Require that a parent company in violation of the PBM Act divest its pharmacy business within three years.
• Enable the Federal Trade Commission, the Department of Health and Human Services, Antitrust Division of the Department of Justice and state attorneys general to issue orders requiring violators of the PBM Act to divest their pharmacy business and disgorge any revenue received during the period of such violation.
• Direct the FTC to distribute any disgorged revenue to harmed communities, including consumers overcharged at vertically integrated pharmacies.
• Mandate reporting of all divestitures to the FTC, and allowing the FTC to review all divestitures and subsequent acquisitions to protect competition, financial viability and the public interest.

THE LARGER TREND

The Patients Before Monopolies Act is endorsed by the American Economic Liberties Project, National Community Pharmacists Association, American Pharmacy Cooperative, Pharmacists United for Truth and Transparency, Patients Rising, and AffirmedRx.

ON THE RECORD

"As a life-long pharmacist, I know first-hand how unchecked PBM consolidation and vertical integration have allowed these shadowy middlemen to self-deal and manipulate the system in ways that are driving up drug costs, limiting patient choices, and putting the financial screws to independent community pharmacies," said Representative Harshbarger.  
 

Email the writer: SMorse@himss.org