Carefully crafted, bipartisan pharmacy benefit manger (PBM) reforms were part of the package scuttled in December when Congress was forced to move a simple Continuing Resolution (CR) that expires on March 14, 2025. As Congress continues to complete the 2024 end-of-year funding legislation, the future of PBMs remains in the spotlight.
While PBM reform might have been momentarily sidelined, the desire to get the job done is as strong as ever. That desire was recently on display at an event where a broad community of stakeholders, including a state Attorney General, community pharmacists, residents of rural America, a coalition of transparent PBMs, and ERIC’s President and CEO, James Gelfand, called on Congress to finish the job and enact the PBM legislation Congress already negotiated.
The event included remarks by Oversight Committee Chairman James Comer (R-KY) and Energy and Commerce Committee members Reps. Debbie Dingell (D-MI) and Jake Auchincloss (D-MA). Their comments echoed those of the speakers as they recounted stories of constituents struggling to afford needed prescription drugs who were frustrated by PBM tactics that too often seemed to keep prices high and block access to the most affordable options.
For employers and employees, those comments ring all too familiar. Prescription drug costs have long been the fastest-growing component of health benefit costs, jumping 8.4% in 2023. And while ERIC’s member companies voluntarily pay about 75% of health costs on behalf of tens of millions of workers and their families, PBMs often make delivering drug benefits that are affordable feel like an impossible task.
Since 2018, ERIC has been advocating for policies to reorient PBM practices to lower drug costs and drive value for our workers, their families, and retirees. We strongly support comprehensive transparency and accountability for PBMs, including policies that were nearly included in the 2024 end-of-the-year funding legislation like:
- Requiring complete and unrestricted transparency into the PBM “black box.”
- Reforming government programs by banning so-called “spread pricing” and delinking PBM profits from drug prices.
- Requiring 100% pass-through of rebates, discounts, fees, and other payments from drug manufacturers.
Employers providing health care today represent the largest portion of the privately insured population. Then you consider that purchasing power and think about what your company wants out of its drug benefits – the answer is clear – you want PBMs to negotiate the best price possible and offer the lowest-cost product available. This is how you can design a plan to minimize both the cost-sharing and the insurance premiums, so your workforce has the best access possible to the medications it needs.
But under the current system, employers trying to design this kind of pharmacy benefit are caught between a rock and a hard place. As long as the PBMs can keep some or all of the rebates and fees they get from drug companies (either directly, or through their group purchasing organizations), they will always have an incentive to choose drugs with bigger rebates, not the lowest net costs. And as long as they can keep the rebates and prices secret, the employer has no way of cracking down on this bad behavior.
It doesn’t have to be this way. The solution is for Congress to remove PBMs’ ability to play both sides. They either get paid by the employer or by the drug company—not both. Congress can accomplish this by enacting rebate passthrough and delinking PBM profits from drug prices – policies agreed to in December but not signed into law.
If Congress enacts this legislation, employers will be able to lower drug costs for workers and families. It’s that simple. Give employers the tools, and we will get it done. Now, will it completely solve the drug pricing issue? No, it’s not a silver bullet. But it can make a massive difference.
Congress already did the hard work. In March, they need to finish the job.
Learn more about ERIC’s work on PBM reform here: