Guest opinion: Lesley Smith: Congress must act on PBMs to lower drug costs for Coloradans

By Lesley Smith

The rising cost of prescription drugs is a significant burden on Colorado families. I’ve been traveling HD-49 the past year and a half, and I’ve heard this firsthand from my constituents. We must make health care more affordable and lowering prescription drug costs will help to achieve this.

In Colorado, we’ve made strides toward reducing prescription drug costs by capping insulin prices and fostering competition in the health insurance market. However, a critical piece of the puzzle to bringing down drug costs remains beyond the reach of state-level solutions: the unchecked power of pharmacy benefit managers (PBMs).

PBMs began as simple intermediaries decades ago, processing drug claims for employers. Over time, they have evolved into profit-driven machines that often prioritize their financial interests over patient care. Today, just three PBMs control 80% of the market. These corporate giants, integrated within even larger health conglomerates alongside health insurance companies, wield substantial influence over which drugs are covered and how much we pay at the pharmacy counter.

The amount of revenue PBMs take in is staggering. Studies reveal that for every dollar spent on brand-name drugs, about 50 cents goes to PBMs and other entities — not to the companies researching and developing new treatments. They have created a system that is fraught with conflicts of interest and that enables price gouging that harms consumers.

Here’s one way PBMs work. PBMs negotiate rebates and discounts from drug manufacturers, ostensibly to lower costs. Yet, rather than passing all those savings on to patients, PBMs charge Coloradan’s copays based on inflated list prices.

Overall net prices for brand-named medicines are only increasing by 1% a year. However, patient out-of-pocket costs for these same drugs have increased by 50% in the last decade. PBMs bear significant responsibility for the additional cost burden. They also frequently charge drug companies a per-sale fee for the privilege of inclusion in their formulary — a system that allows PBMs to rake in enormous profits while Coloradans struggle to afford their prescriptions.

Earlier this summer, U.S. Department of Health and Human Services Secretary Xavier Becerra called for policies that eliminate PBMs from the market. He accused them of “sucking money out of the system” without adding value. The secretary is right.

In Colorado, we have made significant progress in controlling health care costs, but too many PBM practices extend beyond our reach. To truly protect patients and lower drug costs, we need Congress to step up and enact meaningful reforms. Federal legislation must ensure that PBMs pass rebates and discounts directly to patients, prohibit fees tied to drug list prices, and mandate transparency in their operations.

I urge Senators Bennet and Hickenlooper, along with our House delegation, to prioritize PBM reform. By addressing the outsized influence of these intermediaries, we can take a critical step toward making prescription drugs affordable for all Americans. Colorado has demonstrated that bipartisan action is possible, and now it’s time for Congress to follow suit. Together, we can build a healthcare system that truly prioritizes patients and alleviates the financial burden for everyone.

Lesley Smith currently serves as CU Regent-at-Large and is running for State House in HD-49. Previously, she worked for thirty years as a scientist and educator at CU, served on Boulder Valley School Board, and was the first woman aquanaut in the underwater Aquarius research facility.

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