Proposed law eliminates monopoly on pharmaceutical delivery chain

Representatives Diana Harshbarger (R-Tenn.) and Jake Auchincloss (D-Mass.) introduced the Patients Before Monopolies (PBM) Act Wednesday in Congress.

This bipartisan, bicameral legislation would prohibit joint ownership of pharmacy benefit managers (PBMs) and pharmacies, a gross conflict of interest that enables these companies to enrich themselves at the expense of patients and independent pharmacies.

The Senate version of the bill was introduced by Senators Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.)

The legisltation states that over the past decade, pharmacy benefit managers (PBMs) — the middlemen between pharmacies and health insurance companies — have morphed into large healthcare conglomerates that exercise control over every link in the prescription drug coverage and delivery chain.

Today, the largest healthcare conglomerates each own a PBM — which pays for pharmacy services — as well as the pharmacy chains that provide those services. This inherent conflict of interest results in higher drug costs for patients and fewer independent pharmacies, but bigger profits for the corporate healthcare giants.

The Patients Before Monopolies (PBM) Act would address this by:

Prohibiting a parent company of a PBM or a health insurer from owning a pharmacy business

Requiring that a parent company in violation of the PBM Act divest its pharmacy business within three years

Enabling the FTC, Department of Health and Human Services, Antitrust Division of the Department of Justice, and state attorneys general to issue orders requiring violators of the PBM Act to divest its pharmacy business and disgorge any revenue received during the period of such violation

Directing the FTC to distribute any disgorged revenue to harmed communities, including consumers overcharged at vertically integrated pharmacies

Mandating reporting of all divestitures to the FTC, and allowing the FTC to review all divestitures and subsequent acquisitions to protect competition, financial viability, and the public interest.

"As a life-long pharmacist, I know first-hand how unchecked PBM consolidation and vertical integration have allowed these shadowy middlemen to self-deal and manipulate the system in ways that are driving up drug costs, limiting patient choices, and putting the financial screws to independent community pharmacies," Harshbarger said. "I'm a proud conservative Republican, but we have antitrust laws for a reason. That's why I'm joining my colleagues in introducing the bipartisan Patients Before Monopolies Act, which will protect consumers and taxpayers, and ensure fair competition by breaking up these anticompetitive, conflict-of-interest arrangements. Federal regulators should never have let this excessive concentration of our healthcare industry happen in the first place, and so it's up to Congress to get the job done."