NCPA is urging the Department of Government Efficiency to address the waste, fraud, and abuse created by the business practices of pharmacy benefit managers. In a letter to Rachel Riley, senior adviser for the U.S. Department of Health and Human Services, NCPA CEO Douglas Hoey explained the ways in which PBMs use their market dominance to crowd out smaller competitors, steer patients to their own pharmacies, and use the threat of higher premiums for seniors to squeeze more and more subsidies from Medicare and other government insurance programs.
"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," said Hoey. "Shockingly, these insurer-PBMs received billions of dollars in bailout subsidies from the federal government to keep premiums stable in Medicare Part D.
"This wasteful use of taxpayer dollars is one in which DOGE should have a particularly strong interest," he continued. "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 tremendous sums of money 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."
Hoey said DOGE should work with the Centers for Medicare & Medicaid Services to eliminate or significantly tighten up the Medicare Drug Price Negotiation Program.
"We are concerned that pharmacies will have to float the program to the tune of roughly $11,000 per independent pharmacy per week; that pharmacies will not be paid fairly by PBMs; and that manufacturer refund payments to pharmacies will be delayed. A recent study found that pharmacies could forfeit an average of $43,000 in annual revenue due to underpayments—roughly equivalent to a pharmacy technician's yearly salary."
