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Where’s Biden’s outrage over Pharmacy Benefit Managers?

Blames middlemen for high meat prices, forgets drug supply chain


The Washington Times


New government data reveals Americans are facing rising prices at the grocery store — especially with beef, pork and chicken. Speaking about the situation, President Biden commented, “these [meat processing] companies can use their position as middlemen to overcharge grocery stores and, ultimately, families.” It’s a sentiment echoed by a choir of Democrats in Congress.

The White House quickly blames a small group of “middlemen” for high hamburger prices. But where’s the outrage over the middlemen of the drug supply chain — called Pharmacy Benefit Managers? Unlike rising meat prices, which will likely abate once economy-wide inflation subsides, lifesaving medicine costs have been skyrocketing for decades.


Over the past 20 years, expenditures on prescription drugs in the U.S. have nearly tripled, and 2021 Gallup polling shows an estimated 18 million Americans skipping prescribed medication because it was unaffordable.

PBMs are a big reason why.

Acting as the gatekeepers between drug manufacturers, insurance companies and the consumer market, a small group of middlemen holds significant leverage. Four PBMs control 85% of the market, and they use that clout to siphon hundreds of billions of dollars annually from the drug supply chain that should have gone to patients as savings at the pharmacy counter. Translation: PBMs are jacking up the price tag of your medicine.

Democrats have rightly called attention to ballooning drug prices. But the middleman scheme is rarely their focus.

Mr. Biden’s legacy legislation — the Build Back Better bill — instead fixates on addressing pharmaceutical prices with government meddling in the free market. Policies targeting the profiteering practices of PBMs are nowhere to be found in the 2,468-page bill. In fact, the Biden administration and Congress have gone out of their way to block rules regulating PBMs.

For example, a Trump-era executive order would have forced the discounts already provided by drug manufacturers to be passed along to Medicare Part D patients at the point of sale. That rule — intended to block PBM pickpocketing — was initially scheduled to take effect this year. But Mr. Biden delayed it until 2023, and then Congress punted it another three years as part of the infrastructure package. BBB would scrap it indefinitely.

Fortunately, state policymakers are ready to pounce when Washington won’t.

In September, Colorado passed legislation that imposes new guardrails for PBM activities. A bill signed by New York Gov. Kathy Hochul at the end of December forces PBMs to register with the state. It also sets up a system in which consumers, pharmacies and health care providers can report PBM funny business. Ohio has launched an investigation into a PBM practice that, according to a Columbus Dispatch headline, “gouges patients and taxpayers.”

The Biden administration is up-in-arms about the middlemen of the meat industry supposedly manipulating prices for consumers. But on the PBM issue, the White House is bizarrely silent.

• About the author: Dr. Chad Savage is an Internal Medicine physician, health care policy adviser and member of the Job Creators Network.