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House Speaker Mike Johnson (R-Louisiana), an ally of President Trump, plans to launch the president-elect's plan to eliminate big insurance intermediaries in his year-end government spending plan.
President-elect Donald Trump vowed to take on big pharmacy benefit managers (PBMs) during a press conference Monday at Mar-a-Lago. “Frankly, they're horrible middlemen who make more money than drug companies, but they don't do anything other than be middlemen. We're going to eliminate the middlemen,” Trump said.
President Trump said that Health and Human Services nominee Robert F. Kennedy Jr. and Centers for Medicare and Medicaid Services nominee Dr. Mehmet Oz have talked extensively about PBM reform, adding, “These intermediaries… , they're rich because we're going to knock them out.'' intermediaries. We're going to bring drug costs down to levels that no one has ever seen before, and really, I'm going to spend more time talking about that with Bobby, the executives, Oz, everyone. We spent more time talking about that than anything else. ”
House Speaker Johnson, an ally of President Trump, plans to begin “eliminating” PBM intermediaries as early as this week. Johnson said the spending bill to prepare for the incoming Trump administration and keep the U.S. government running is nearly complete. He expects the text of the bill to be released this week. This could include a key part of President Trump's health care agenda: cracking down on middlemen pharmacy benefit managers who drive up drug prices for seniors.
One of the biggest reasons for high prescription prices is the PBMs of major insurance companies. Three giant PBM intermediaries, CVS Caremark, Express Scripts, and OptumRx, control approximately 80 percent of the total PBM market and administer drug benefits for more than 270 million Americans.
PBMs inflate profits by pushing out more expensive drugs when designing formularies and lists of drugs available to customers. By setting favorable prices and co-payments, PBMs essentially determine how much patients will pay out-of-pocket and what medicines are available to them. If a drug is not on your prescription, your insurance company will not cover it. And in many cases, doctors won't prescribe it even if patients need it.
Kevin Duane, a pharmacist in Jacksonville, Florida, recently told the House Oversight and Accountability Committee: Because, for better or worse, PBMs can benefit more from it. ”
Essentially, PBMs are incentivized to prescribe more expensive drugs. This is a broken system that President Trump has long begun to repair. In 2020, President Trump introduced a policy that would allow seniors to directly benefit from rebates that drug companies pay to PBMs for preferential listing on insurers' drug formularies. These rebates were intended to reduce the cost of expensive medicines for seniors. President Trump laid out a detailed plan to extend these savings to seniors and potentially save billions of dollars.
“That means patients will benefit, not very wealthy people,” Trump said at the time. “Today's action ends this inequity and demands that these discounts go directly to the people who need them.”
Unfortunately, Joe Biden's so-called Inflation Control Act repealed President Trump's drug rebate rules, leaving the most at-risk seniors unable to get the savings they need.
President Trump and his medical team will no doubt reinstate the Trump rebate rule and huge savings for seniors. Meanwhile, House Speaker Johnson and Trump's allies in Congress could get a head start on Trump's health care policy.
More than 20 conservative groups recently encouraged Congress to pass the PBM Accountability Modernization and Securing Act (S. 2973). This bill would reset the money-making incentives that benefit patients by decoupling PBM fees from drug prices. Decoupling drug prices from the fees charged by PBMs would help fix the incentives in the system that drive up drug costs for seniors and PBM profits.
Congress could pass a final bill before Christmas. Repair damaged systems. Providing savings to older Americans. That would be a great start for President Trump's health care policy.
