Neil Sedaka, a singer, songwriter, and pianist who died last week, hit the charts in the early 1960’s with the hit single, “Breaking Up is Hard to Do.” He liked it so much that he released a newer version of it some 10 years later, with a slower tempo.
The Break Up Big Medicine Act
Senators Josh Hawley and Elizabeth Warren are looking to put that phrase to the test when it comes to going after Pharmacy Benefit Managers in the health care industry.
The act, officially titled, “The Break Up Big Medicine Act”, was released in February. The bipartisan measure seeks to reign in the monopoly they feel exists with both prescription drug claims and prescription drug wholesalers, and the insurance companies, physician groups and pharmacists who are involved.
On their official website, Senator Warren is quoted as saying:
“There’s no question that massive health care companies have created layers of complexity to jack up the price of everything from prescription drugs to a visit to the doctor. The only way to make health care more affordable is to break up these health care conglomerates. Our bill would be a monumental step towards ending the stranglehold that corporate giants have on our broken health care system.”
Senator Hawley says:
“Americans are paying more and more for healthcare while the quality of care gets worse and worse. In their quest to put profits over people, Big Pharma and the insurance companies continue to gobble up every independent healthcare provider and pharmacy they can find. Working Americans deserve better. This bipartisan legislation is a massive step towards making healthcare affordable for every American.”
Pharmacy Benefit Managers
Pharmacy Benefit Managers (PBM), are companies hired by health plans to manage prescription drug benefits. Which drugs are covered, how much they cost, and where patients can fill prescriptions are determined. Such things as to what pharmacies are “in network,” prior authorizations, and obtaining price discounts in exchange for favorable positioning are selected. They started out mainly as an administrative service but grew in power to issue decisions in the daily operations of the pharmacy web.
The largest PBMs in the United States are CVS Caremark, Express Scripts, and Optum Rx. Together, they process nearly 80% of all U.S. prescription claims.
The largest prescription drug wholesalers in the United States are McKesson, Cencora (formerly AmerisourceBergen), and Cardinal Health. They control over 90% of the U.S. drug‑distribution market.
On their website Warren and Hawley state the companies involved are “vertically integrated”. This means one company can own or control every part of the health care supply chain—from health insurance companies and PBMs to pharmacists and physicians.
“By controlling both the company that pays for health care services (e.g., a health insurer) and also the entity that sets the prices for those health care services (e.g., a health care provider), these conglomerates may be steering business to their own affiliates, evading laws intended to rein in corporate profiteering, or using providers they employ to boost government payments and pad their bottom lines.”
Analysis
In my opinion this is an uphill fight for the two Senators. Breaking up here is hard to do. But it is a step in the right direction. Legislation or court rulings can be part of the solution. It is better than simply using social media to bad mouth corporations and their executives. Social media is freedom of speech and can draw a lot of attention but leads to no solution. It is also better than cheering on those who assassinate health care executives.
The health care monopoly is bigger than pharmacy benefit managers. For example, this legislation does not address its historical acquisition mania and the power it has produced. Nevertheless, I encourage all of you to contact one or both of your U.S. Senators and express your support. I am not sure it will garner the support, let alone the attention, of the Trump administration. But, as I said, it is a step in the right direction.
