NAM Campaign: Reform PBMs to Help Employers, Workers

Update: The National Association of Manufacturers has called on congressional leadership to support and advance legislation aimed at reforming the pharmacy benefit manager market in a later dated November 7th. Click here to read the letter. Click here to take action.

Pharmacy benefit managers—companies that were first established to manage the cost of prescription drugs—are contributing to soaring health care costs and driving up the price of medications. These entities cannot go unchecked, and Congress must act, an NAM ad campaign launched Thursday is advocating.

What’s going on: The campaign, which includes both TV and digital ads, calls out PBMs—“middlemen owned by large health insurers”—for pocketing sizeable discounts from drug manufacturers rather than passing on the discounts or rebates to workers or employers.

“America’s manufacturing workforce has struggled with skyrocketing health care costs driven by insurer-owned PBM middlemen for far too long,” said NAM President and CEO Jay Timmons.
“Manufacturers are committed to providing quality health care benefits to our employees, so we need reforms to stop insurer-owned PBMs from keeping discounts and driving up prescription drug costs.”

Why it’s important: PBMs emerged in the late 1960s as a way of helping insurance companies and employers contain spending on prescription medications—but their business model has evolved significantly in the past half-century.

Now just a few PBMs—subsidiaries of bigger health care firms—control up to 89% of the prescription drug market and operate with limited federal oversight.
And they exert even more control in the industry by steering business toward specific pharmacy networks, frequently ones owned by their parent companies.

Congressional moves: Congress is considering various legislative solutions to address PBM rebate, fee and payment structures.

The last word: “Manufacturers support reforms to the PBM model that increase transparency, ensure pharmaceutical savings are passed from the PBM to workers and plan sponsors and delink PBM compensation from the list price of medication,” said NAM President and CEO Jay Timmons. “Congress must reform the PBM system so employers can negotiate, compete and achieve profit savings.”

NAM in the news: POLITICO’s Influence newsletter highlighted the NAM’s campaign.

Tell Congress To Reform PBM’s Today

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I hope this email finds you well. I am writing to urgently request your support in protecting America's workers by supporting and advancing legislation aimed at needed reforms to the pharmacy benefit manager (PBM) marketplace. Many insurance companies are paying more than 100 times the retail cost of so-called specialty generic drugs—largely because the pharmacy benefit managers setting the prices often also own the pharmacies, according to The Wall Street Journal .  The high costs of these drugs are “undermining the benefits of generics … while saddling patients, many on fixed incomes and insured by Medicare, with considerable deductible payments or other out-of-pocket costs.” Congress must reform the PBM system so that employers and their employees can negotiate, compete and achieve profits and savings. Currently, the PBM market is rife with misaligned incentives and suffers from a lack of transparency as just three corporations control 80% of the marketplace.

Thank you for your attention to this urgent matter. I look forward to your support for this much-needed legislation.

Subject: Support PBM Reform