Bipartisan Bill Targets Pharmacy Middlemen Driving Up Drug Costs

A bipartisan group of lawmakers is rolling up their sleeves to tackle the murky world of Pharmacy Benefit Managers (PBMs), accusing them of driving up drug costs by favoring pricier medications and keeping savings out of reach.

Led by Rep. Mariannette Miller-Meeks, a physician and Republican from Iowa, the team unveiled the "Delinking Revenue from Unfair Gouging (DRUG) Act" on Tuesday. The bill aims to reform how PBMs are paid by requiring a flat fee for their services, rather than the current practice of charging a percentage based on drug prices—a setup that critics argue incentivizes higher costs.

PBMs, for the uninitiated, are the middlemen between insurance companies, drug manufacturers, and pharmacies. They were created to help control drug prices and access, but lawmakers say the current system allows them to inflate drug costs for sheer profit. Miller-Meeks minced no words, saying, "Pharmacy benefit managers have excessive influence over the prices patients pay at the pharmacy counter. Local Iowa pharmacies are closing due to greedy PBM practices, impacting proximity and access to medications for Iowans."

According to the Iowa Pharmacy Association, PBMs often use opaque reimbursement models that underpay pharmacies for their services. This has caused pharmacy closures nationwide—29 in Iowa alone last year and over 2,300 across the country.

While PBMs have arguably expanded access to medications, their dominance in the market has grown concerning. The Federal Trade Commission (FTC) reported that three PBMs now control nearly 80% of all prescriptions filled in the U.S., thanks to decades of mergers and acquisitions.

Rep. Nannette Barragán, a Democrat from California and co-sponsor of the DRUG Act, pointed out another critical issue: PBMs are incentivized to push patients toward high-profit drugs, which might not be the most effective options. "This broken system disproportionately harms low-income individuals, seniors, and those with chronic illnesses who rely on life-saving prescriptions to manage their health," Barragán said.

Rep. Donald Norcross, a Democrat from New Jersey, echoed concerns about the financial strain on families, stating, "Americans deserve access to quality health care and affordable prescription drugs. The DRUG Act reins in prescription drug prices by removing the incentive for pharmacy benefit managers to drive up costs, increasing transparency, and prioritizing patients over profits."

The lawmakers behind the DRUG Act are aiming to bring transparency and fairness to a system that, for many Americans, feels like a rigged game. Whether this bill will pass remains to be seen, but if it does, it could signal a long-awaited shift in the balance of power between pharmacies, PBMs, and patients.