President Trump’s bold plan to “knock out the middleman” in prescription drug pricing could revolutionize healthcare costs for millions of Americans.
At a Glance
- Trump targets Pharmacy Benefit Managers (PBMs) to reduce drug costs
- Three major PBMs control 80% of the market, affecting over 270 million Americans
- The Modernizing and Ensuring PBM Accountability Act aims to reform PBM operations
- House Speaker Johnson to include PBM elimination measures in upcoming spending bill
- Trump’s plan builds on previous attempts and counters Biden’s policies
Trump’s Crusade Against PBMs
President-elect Donald Trump has set his sights on a new target in his ongoing battle to reduce healthcare costs: Pharmacy Benefit Managers (PBMs). These often-overlooked but powerful entities act as intermediaries between drug manufacturers, insurers, and pharmacies, wielding significant influence over prescription drug prices and accessibility.
Trump’s criticism of PBMs is scathing and direct. He views them as unnecessary middlemen who inflate drug prices without adding value to the healthcare system. In a recent statement, Trump didn’t mince words about his intentions:
“The horrible middleman that makes more money, frankly, than the drug companies, and they don’t do anything except they’re a middleman. We’re going to knock out the middleman.” – President Trump
The PBM Monopoly
The urgency of Trump’s campaign becomes clear when considering the market dominance of PBMs. Three major players—CVS Caremark, Express Scripts, and OptumRx—control a staggering 80% of the market. This oligopoly affects over 270 million Americans, giving these companies unprecedented power to influence drug prices and availability.
Critics argue that PBMs exploit their position to inflate profits by promoting more expensive drugs and controlling formularies—the lists of drugs covered by insurance plans. This practice not only drives up costs for consumers but also potentially compromises patient care.
Expert Testimony and Political Support
Kevin Duane, a pharmacist who testified on the matter, provided a damning assessment of PBM practices:
“Patients and their doctors have virtually no say in what drugs are used, since the PBM essentially forces which drugs can be used – not because a drug is better or worse, but because the PBM can make more money from it.” – Kevin Duane
Trump’s campaign against PBMs isn’t a solo effort. His proposed Health and Human Services nominee, Robert F. Kennedy, Jr., and CMS nominee Dr. Mehmet Oz have reportedly discussed PBM reforms with the President-elect. Moreover, House Speaker Johnson has pledged to begin efforts to eliminate PBM middlemen, potentially including measures in an upcoming spending bill.
Legislative Action and Conservative Support
The centerpiece of this reform effort is The Modernizing and Ensuring PBM Accountability Act (S. 2973). This bill, supported by over 20 conservative groups, aims to reshape PBM incentives and decouple their fees from drug prices. The goal is clear: reduce costs for seniors and ensure that PBMs work in patients’ best interests, not just their own bottom line.
Trump’s approach builds on his previous attempts to reform drug pricing. During his first term, he introduced a policy to pass drug manufacturer rebates directly to seniors—a move that was unfortunately repealed by the Biden administration. The Trump Rebate Rule aimed to save seniors billions by redirecting discounts from PBMs to patients, a clear indication of his commitment to this issue.
As the 2024 election approaches, healthcare reform remains a critical issue for American voters. Trump’s focus on PBMs demonstrates a nuanced understanding of the complexities driving healthcare costs. By targeting these influential yet often invisible players, Trump’s campaign promises to address a root cause of high prescription drug prices, potentially delivering significant relief to millions of Americans struggling with healthcare expenses.
Sources:
- Trump Takes on Pharmacy Benefit Managers: ‘We’re Going to Knock Out the Middleman’
- How the US Election May Affect Drug Pricing, Medicare, and Medicaid Programs – Key Areas to Watch
