Op-Ed: B. Douglas Hoey: Rep. Brett Guthrie and the Energy and Commerce Committee have a chance to push PBM reform over the finish line

In health care, competition is being throttled, drug costs are rising, pharmacies are closing, and patients are being stranded. B. Douglas Hoey writes that Rep. Brett Guthrie can solve these problems.

The effort to reform pharmacy benefit managers (PBMs), the divisions of big health insurance companies that decide which drugs consumers’ health plans will cover, stalled at the end of last year as Congress scrambled to fund the government. While it was a terrible disappointment for the country’s community pharmacies that are being forced to close, it was competition and consumer pocketbooks that were collateral damage.

The good news for taxpayers is that Rep. Brett Guthrie (R., Ky.) was elected to chair the House Energy and Commerce Committee, which has broad jurisdiction over the country’s health care system. Last October, when members on both sides were trying to include PBM reform in a year-end package, Guthrie said “if I get to be chair of this committee, we will continue down the path to PBM reform. This is just a bite at the apple.”

Guthrie has a long history of supporting lower prescription drug prices. He’s learned a lot from visiting local community pharmacies and talking with the owners about the challenges they face because of PBMs and their Big Insurance masters. During his time in Congress, he has sponsored many bills that would reform PBMs, protect competition, and allow community pharmacies to operate and provide health care to their patients at the pharmacy. Now is the time to pass reform because, driven by big health insurance, drug prices continue to go up and the number of pharmacy choices for consumers continues to go down.

Another sign that Chairman Guthrie is serious about addressing prescription drug costs was his appointment of Rep. Buddy Carter (R., Ga.) to chair of the Energy and Commerce health subcommittee. Chairman Carter has long been one of the strongest advocates on Capitol Hill for reducing prescription drug prices, addressing the negative effects of consolidation in the health insurance industry and passing common sense PBM reform.

The largest three PBMs control 80 percent of all prescriptions in the United States. Those three companies have combined with the largest health insurer companies to control the patient healthcare journey. For example, the big insurance companies and their PBMs decide which medicines patients may take, which pharmacies patients may use, how much patients must pay at the counter, and how much pharmacies are reimbursed for dispensing medicine.

CVS Caremark, which owns Aetna, also owns one of the largest PBMs in the world and the largest pharmacy chain in the world. PBMs Express Scripts and OptumRx, which are owned by Cigna and UnitedHealth Group, respectively, also own large mail-order pharmacies. All of them have a powerful incentive to manipulate the market at the expense of patients and pharmacies. And they do.

PBMs frequently reimburse independent pharmacies less than the independent pharmacies must pay to acquire the drugs and fill prescriptions. The PBMs decide how much to pay other pharmacies and they also decide how much to pay their own pharmacies. In other words, they force their smaller competitors to incur losses that can’t be sustained. They also steer patients away from independent pharmacies to their own big box stores or mail-order pharmacies. You need a brand name drug? The PBM may cover it, but only if you use their pharmacy. It isn’t free-market competition. It’s piracy.

Fortunately, Congress has a chance to finish what it started last year, with PBM reform having wide bipartisan support. Importantly, the PBM reform legislation would save taxpayers $6 billion. That fact alone is compelling enough. In addition, Democrats and Republicans alike understand what happens when consumers have to pay more for prescription drugs and lose access to health care at their pharmacy. In many parts of the country, especially rural and underserved areas, local independent pharmacies are the only accessible health care provider.

They provide the kind of access to patient care that mail-order and big box pharmacies don’t, and they are constantly innovating to improve health outcomes and increase efficiency. Home delivery, immunizations, point-of-care testing, diabetes management, and simply being available to answer questions or provide advice to patients trying to decipher their on-line searches make them competitive in the marketplace and essential to their patients.

We’re grateful for Guthrie’s strong support, and we are very excited to work with him and his committee this year to pass PBM reform. Competition is being throttled, drug costs are rising, pharmacies are closing, and their patients are being stranded.

B. Douglas Hoey is CEO of the National Community Pharmacists Association, which represents over 18,000 independent pharmacies across the country.