Middlemen Are Profiting off the Broken US Pharma System
Pharmacy benefit managers push expensive medications and slash drug reimbursement rates, pocketing the profits for themselves. Congress looked set to regulate these shadowy middlemen — but $50 million in industry lobbying later, the effort has stalled.
Small, independent pharmacies say that pharmacy benefit managers are putting them out of business. (SteFou! / Flickr)
Lawmakers from both parties and thirty-nine state attorneys general joined forces to stop the shadowy corporate middlemen behind rising drug prices and the death of independent pharmacies. Now these reform efforts are in peril, following nearly $50 million in industry lobbying — including tens of thousands to congressmembers who sponsored reform legislation.
These largely unregulated middlemen, called pharmacy benefit managers, serve as intermediaries between insurers and pharmaceutical manufacturers, determining which drugs insurers will cover and how much they cost. But they are incentivized to opt for the most expensive medicines and slash drug reimbursement rates to maximize profit, hurting both patients and small pharmacies.
As Federal Trade Commission chair Lina Khan just declared at a White House roundtable on the matter, these “dominant gatekeepers” have “outsized power to decide how people do or don’t receive the lifesaving prescription drugs they depend on.”
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