MINNEAPOLIS — Editor's Note: The above video was first published on 6/7/2024.
As the election draws nearer both former President Donald Trump and Vice President Kamala Harris — the Republican and Democratic nominees for president, respectively — are speaking up about their respective plans for making health care more affordable for Americans.
Vice President Harris has specifically named PBMs or Pharmacy Benefit Managers as a target for more oversight and transparency and Trump issued an executive order calling out PBMs back in 2020.
But what are they?
PBMs primarily run prescription drug coverage for insurers, large employers and other clients. They also set up formularies, or lists of covered drugs, and negotiate rebates off drug prices.
Most agree that pharmacy benefit managers entered the market in the 1980s as Americans started using more drugs than ever before. The presence of the PBMs initially let pharmacists focus more on their businesses by handling backend tasks and saved insurers money through bargaining with drug manufacturers.
The heightened scrutiny comes as the Federal Trade Commission announced a lawsuit against the three largest PBMs in the country, Caremark, Express Scripts and Optum Rx. Those three companies process roughly 80% of prescriptions nationwide, according to the FTC.
The FTC said the rebating practices of the three companies have led to artificially inflated list prices for people. List prices are what a drugmaker initially sets for a product and what people who have high deductible plans or no insurance are sometimes stuck paying for prescriptions.
Harris' campaign promises that, if elected, Harris "will increase competition and demand transparency in the health care industry, starting by cracking down on pharmaceutical companies who block competition and abusive practices by pharmaceutical middlemen who squeeze small pharmacies’ profits and raise costs for consumers."
The Pharmaceutical Care Management Association, which lobbies for PBMs nationwide has long argued that their work is imperative in saving consumers money on drugs.
“PBMs support transparency that empowers prescribers, plan sponsors, policymakers, and, most importantly, patients, with the information they need to lower costs while improving access to needed medications. What we don’t support are measures that would empower drug companies to raise costs.” Greg Lopes, vice president of public affairs., for the PCMA.