Garden State Times

As Congress enters its lame-duck session following the election, one urgent issue on the legislative agenda is the need to reform the pharmacy benefit manager (PBM) industry. PBMs, which act as intermediaries in the prescription drug supply chain, are under scrutiny for manipulating the market and driving up the cost of medicines for patients.

“Now that the election is over and Congress is in its lame duck session, one of the most pressing issues is reforming the abusive PBM industry,” Jeanette Hoffman, executive director of Patients Come First New Jersey, wrote in an op-ed. “PBMs—or pharmacy benefit managers—are the middlemen in the prescription drug pipeline and have been charged with manipulating the market and inflating the cost of medicines for patients.”

Hoffman writes that the Federal Trade Commission (FTC) recently filed a lawsuit against the nation’s three largest PBMs—CVS Health's Caremark Rx, Cigna's Express Scripts, and UnitedHealth Group's OptumRx. Together, these companies control 80% of all prescriptions in the United States. The FTC accuses them of orchestrating a “perverse drug rebate system” that has artificially inflated the cost of insulin.

According to the lawsuit, PBMs incentivized drug manufacturers to raise insulin list prices, excluded more affordable options from formularies, and shifted costs to vulnerable patients. These practices have led to staggering price increases for insulin, with the average list price for the brand-name insulin Humalog rising from $21 in 1999 to over $274 by 2017—a 1,200% increase.

The FTC reports that one in four diabetes patients could not afford insulin in 2019, leading to cases of medication rationing and even deaths. Lower-cost insulin options, when available, were often sidelined in favor of higher-priced products that generated greater rebates for PBMs.

Despite these billions in rebates and fees collected by PBMs, insulin has become increasingly unaffordable, prompting widespread calls for reform. A Morning Consult poll shows that 69% of registered voters believe Congress should prioritize PBM reform before the end of 2024.

Lawmakers have begun taking action, with seven congressional committees having already voted in favor of PBM transparency and reform measures, signaling bipartisan support for addressing the issue. Meanwhile, in New Jersey, Gov. Phil Murphy has signed several bipartisan laws to increase oversight of PBMs. However, experts and advocates stress that more comprehensive reforms are needed to curb the industry’s exploitative practices.

Jeanette Hoffman is a public affairs consultant and media spokesperson, specializing in strategic messaging, marketing, crisis communications, and public affairs campaigns. As president of a public affairs firm, she has more than 20 years of experience advising corporate and non-profit clients on issues of advocacy, political campaigns, policy, and state government. She is also a regular media commentator on national television and radio, offering insights on politics and public policy.