Earl L. “Buddy” Carter, U.S. Representative for Georgia, said that the PBM Reform Act aims to protect patients and pharmacies from detrimental practices by pharmacy benefit managers (PBMs) through enhanced transparency, competition, and accountability. This announcement was made in a press release.
“It’s time to bust up the PBM monopoly, which has been stealing hope and health from patients for decades,” said L. “Buddy” Carter. “As a pharmacist, I’ve seen how PBMs abuse patients firsthand, and believe that the cure to this infectious disease is transparency, competition, and accountability, which is exactly what our bipartisan package provides. The PBM Reform Act will: Ban ‘spread pricing’ in Medicaid and move to a transparent system that ensures pharmacies are fairly and adequately reimbursed for serving Medicaid beneficiaries. Establish new requirements for PBMs under Medicare Part D, including a policy to delink PBM compensation from the cost of medications and increase transparency.”
Pharmacy benefit managers serve as third-party administrators of prescription drug programs for health insurers, self-insured employers, and government agencies. They negotiate with drug manufacturers to secure discounts and rebates on medications, manage pharmacy networks, and process prescription drug claims. Additionally, PBMs provide services such as medication therapy management and mail-order pharmacy services.
A report by the Federal Trade Commission (FTC) revealed that the “Big 3 PBMs”—Caremark Rx, LLC (CVS), Express Scripts, Inc. (ESI), and OptumRx, Inc.—significantly marked up numerous specialty generic drugs at their affiliated pharmacies by thousands of percent. Many other drugs were marked up by hundreds of percent. These markups generated over $7.3 billion in revenue from 2017 to 2022 as drugs were dispensed at prices far exceeding estimated acquisition costs. The report also highlighted the practice of spread pricing, where PBMs charge health plans more than they reimburse pharmacies, retaining the difference as profit.
PhRMA reports that 25 hospitals in New Jersey participate in the 340B program, holding 547 contracts with pharmacies across the country. Of these contract pharmacies, only 18% are located in medically underserved areas, which may affect the program’s intended impact. Furthermore, 16% of participating hospitals in New Jersey provide charity care at levels below the national average.
Carter is currently the only pharmacist serving in Congress and represents Georgia’s 1st Congressional District. He serves on the House Energy and Commerce Committee where he advocates for healthcare and drug pricing reform. Carter is recognized for his leadership on pharmacy and health policy issues within the U.S. House of Representatives.
