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Opinion: PBMs are Not Robin Hood: A Not So Tall Tale

Americans deserve fair drug prices. So, why do we allow meddling middlemen to inflate the cost of drug prices? These hidden “negotiators” are called pharmacy benefit managers (PBMs), and they discretely take for themselves discounts we deserve. Luckily Congress has finally drawn up a bipartisan bill, the “Protecting Patients Against PBM Abuses Act,” (H.R. 2880) that will hold these middlemen accountable to the benefit all Americans.

PBMs facilitate negotiations between drug manufacturers and insurance plans. While they should be fighting for the people and advocating for the lowest drug prices, these merry middlemen do exactly the opposite. Instead of Robin-Hooding by passing along the negotiated discount from the pharmaceutical companies, they often keep much of those savings for themselves. A regular Prince John, for those of you who know the tale.

A study by the Ohio Department of Medicaid found that several PBM divisions pocketed the 8.8% difference between what they billed in managed care plans and what they paid pharmacies. That amounts to hundreds of millions of dollars in discounts that the patients never benefit from.

But that’s not where the tale ends. There is common knowledge that the industry is run by three PBMs that control roughly 80% of the market. As a free-market conservative, I cannot stand to see this monopoly control our drug prices. It pains me to think of an unknown goliath running O’Fallon’s hardworking local pharmacies. We must protect our own.

One of the PBMs biggest abuses is how they are paid. They get a percentage of the price they negotiate. The higher the price, the more they make. How can we expect them to negotiate lower drug prices when they benefit from higher prices.

PBMs should not get away with their practices, and I encourage all our elected members of congress to endorse H.R. 2880 and hold PBMs accountable. The bill reforms how PBMs get paid, delinking their fee from drug prices, and establishing a flat fee for their services. They will no longer have the incentive to keep prices high.

As a small business owner, I understand how expensive insurance and medications are. As an adult caregiver with a parent at home, I see that aspect, too. I value our local pharmacies and all Missourians who need access to medications – especially our older Americans, like my elderly dad, a proud American veteran. And I know the importance of market freedom and the role of our government to protect us from those threats.

I call upon all Missouri congressmembers to recognize the dire need for PBM reform and to sign on to this bill.