Carter, Schmidtknecht: The human cost of inaction on PBM reform

Rep. Buddy Carter, R-Georgia

Submitted photo

The case against pharmacy benefit managers and for much-needed reforms of our broken prescription drug pricing system has been convincingly made. What is needed now is a sense of urgency to enact legislation that will rein in these greedy, monopolistic corporations before more people are hurt.

Multiple congressional hearings and a Federal Trade Commission investigation have confirmed what we know from real-life examples to be true. PBMs, owned by health insurance companies, manipulate the drug pricing system and use their considerable market power to engage in anticompetitive practices by steering patients to their pharmacies. 

Three PBMs manage more than 80% of insured lives nationwide. They are extracting large rebates and discounts from pharmaceutical manufacturers in exchange for giving their drugs preferential treatment on the formularies that decide which medications are covered by insurance.

The PBMs pocket those rebates and then steer consumers to the drugs they want consumers to take, essentially cutting patient and provider preferences out of the process. The end results are high out-of-pocket drug costs, a lack of access to many of the medications we need, and wild pricing variations that defy the rules of economics.

This is not some abstract problem or a dry policy argument. It’s a severe flaw in our healthcare system leading to avoidable suffering. And it’s deeply personal for all of us — one of us a pharmacist, and the other parents who are dealing with unimaginable loss.

Bil and Shanon Schmidtknecht’s son, Cole, was a 22-year-old with a bright future. His major health challenge was asthma, a condition he lived with for most of his life but was able to control with a steroid medicine that, at one time, cost $5 at his local pharmacy and cost about $66 in 2023. One day, Cole went to refill his prescription and was informed that the PBM had moved it to a different tier on the drug formulary. Cole now had to pay almost $540, nearly what he paid in rent.

No longer able to afford the medicine, Cole suffered an asthma attack that led to cardiac arrest and, not long after that, his death. The PBM issued a statement of regret about Cole’s demise but said that the pricing of the drug that could have kept him alive was “consistent with industry practice.”

That’s the problem. The PBM industry’s practices are designed to maximize profits and pre-empt the physician-patient relationship by determining what drugs a patient can have, regardless of what is needed to preserve health and lives. This needs to be stopped, and lawmakers need to act before they adjourn this year and not kick the proverbial can down the road to the next Congress.

The roadmap to a better, more sensible prescription drug pricing system is right before us. Break the linkage between drug prices and PBM profits. End a system where middlemen can steer patients to the drugs that generate the greatest profits for them and block access to medicines that may be best for patient health. Pay the PBMs a fair but flat market-based fee for their services and get them out of the business of conflating prescription drug access with the need to please their shareholders.

No family in this country should have to see a life lost because of arbitrary and unconscionable prescription drug pricing practices. We know that PBM reform is justified and necessary.

Multiple pieces of bipartisan legislation have passed House and Senate committees addressing practices like drug formulary manipulation, take-it-or-leave-it pharmacy contracts and spread pricing. There is no reason to keep waiting to get it done. Congress must act now.

Editor’s note: Rep. Earl L. “Buddy” Carter, R-Georgia, is a member of the U.S. House of Representatives, and Bil and Shanon Schmidtknecht of Wisconsin have been advocating for PBM reform since losing their son, Cole. They wrote this for InsideSources.com. Reader reactions, pro or con, are welcomed at AzOpinions@iniusa.org.