Members of Congress Who Want to Examine High Healthcare Costs Should Look No Further than PBMs.

At the recent Senate Finance Committee hearing, The Rising Cost of Health Care: Considering Meaningful Solutions for All Americans, only a few senators highlighted one of the largest drivers of high healthcare costs: Pharmacy Benefit Managers (PBMs). These drug middlemen, which were originally meant to manage prescription drug plans for insurers, have grown to outsized behemoths that control how much Americans pay for their medications. Through opaque, anti-competitive practices within a vertically integrated market, PBMs are able to pocket savings rather than passing them along to patients.

These healthcare giants have created a healthcare oligopoly; the largest three PBMs control 80% of the prescription drug market. Moreover, they are horizontally integrated with pharmacies, healthcare providers, surgery centers, and other players at every level of the healthcare system. History has shown us time and time again that a functioning free market delivers optimal goods and services to consumers. PBMs have been enabled through their nefarious financial partnership with AARP and Democrats, who have provided antitrust scrutiny and bolstered big insurer profits with Obamacare subsidies. This has allowed PBMs to successfully distort the market and operate under perverse incentives. Allowing these conglomerates to continue their harmful practices drives costs up, stifles competition, and further erodes our free market system.

We applaud the Senate Finance Committee for examining high healthcare costs in the United States. As members of Congress continue to root out the causes of high drug prices in America, they should look no further than the massive corporations warping the healthcare market and driving up patient costs.