ALEXANDRIA, Va. (Dec. 20, 2024) – President-elect Donald Trump’s proposed Department of Government Efficiency (DOGE), an initiative led by Elon Musk and Vivek Ramaswamy, should zero in on the big three pharmacy benefit managers if they want to root out government waste and inefficiency, said the National Community Pharmacists Association in a letter to the fledgling organization’s general counsel. NCPA represents the interests of over 18,900 independent community pharmacies across the United States. These pharmacies are the backbone of our health care system, providing essential services to millions of patients across the country.
CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealthcare’s OptumRx control 80 percent of all prescriptions in America, and they use their market dominance to “increase their outlandish profits at the expense of taxpayers, patients, and local, independently run pharmacies,” said NCPA CEO B. Douglas Hoey in the letter, which comes as Congress may again be failing to get PBM reform across the finish line despite broad bipartisan consensus and public outcries for relief.
The PBM reform provisions that were included in the continuing resolution, Hoey noted, “would do precisely what DOGE was created to accomplish: create efficiencies and tax savings in government programs,” saving taxpayers $5 billion by providing common sense reforms to big insurance/PBMs and reining in blatantly anticompetitive behaviors like price fixing and patient steering.
While conversations in Congress are ongoing, Hoey points out in his letter that federal and state governments pay the big three PBMs billions of dollars every year to administer massive government drug programs, such as Medicare Part D, Tricare (for veterans), and the health benefits plan for federal employees.
“PBMs’ anticompetitive practices, opaque reimbursement models, and restrictive contract terms have created an environment in which they can use their overwhelming market power to steer patients away from their competitors to their own pharmacies and pay themselves higher prescription reimbursement rates,” he wrote. “Shockingly, these health insurance PBMs received billions of dollars in bailout subsidies from the federal government to keep premiums stable in Medicare Part D.”
The PBMs have spent tremendous sums of money fighting against reforms and various investigations, and their main argument is that transparency and fairness would cause them to hike premiums in all the programs.
“The PBMs essentially hold states and the federal government hostage by threatening to jack up premiums if they are required to behave fairly or openly. Indeed, they’ve spent tens of millions of dollars fighting against any legislation that would require more transparency, let alone changes to their business model. And of course, they would because they are perhaps the only businesses in the world with the power to set prices for their smaller competitors and tell their competitors’ customers where to shop,” said Hoey.
Hoey also suggested that DOGE should work with the Centers for Medicare & Medicaid Services to eliminate or significantly tighten up President Biden’s program to negotiate drug prices for Part D. The main problem with the program, he said, is that the same PBM business practices that have been creating waste and inefficiencies in the other government programs will be influencing this one too.
“NCPA is concerned that pharmacies will have to float this government program to the tune of roughly $27,000 per independent pharmacy per month; that pharmacies will not be paid fairly by PBMs; and that manufacturer refund payments to pharmacies will be delayed. All of these added pressures could cause increased pharmacy closures and decreased patient access. Unfortunately, the current way CMS plans to administer the program will result in community pharmacies being collateral damage,” he said.
Hoey reminded William McGinley, DOGE’s general counsel, that Trump has long been suspicious of the PBMs.
“President Trump discussed his concerns about the PBM middlemen in his first term. In 2018, NCPA was pleased to see President Trump artfully describe the harm these ‘middlemen’ cause and in a recent interview on Meet the Press and a press conference this week he again mentioned these middlemen and their responsibility for increased drug costs. NCPA thanks DOGE and the transition team for their efforts, and we stand ready to work with the agency to offer possible solutions and ideas,” Hoey said.
Click here to read the full letter.
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