Miller-Meeks, Colleagues Introduce DRUG Act (PBM Reform)

Rep. Mariannette Miller-Meeks

WASHINGTON, D.C. — U.S. Representative Mariannette Miller-Meeks, M.D. (R-IA) today introduced the Delinking Revenue from Unfair Gouging (DRUG) Act, bipartisan legislation that would implement de-linking policies to rein in Pharmacy Benefit Managers (PBMs) in the commercial insurance market. Reps. Nannette Barragan (D-CA), Nicole Malliotakis (R-NY), Brad Schneider (D-IL), Rick Allen (R-GA), and Donald Norcross (D-NJ) joined Miller-Meeks in introducing the bill.

The DRUG Act implements de-linking policies, which requires PBMs to only charge a flat fee for drug placement versus letting them continue to charge a percentage of the drug price. The current structure incentivizes PBMs to promote higher-priced medicine that takes money away from patients.

“Pharmacy benefit managers (PBMs) have excessive influence over the prices patients pay at the pharmacy counter,” said Miller-Meeks. “Local Iowa pharmacies are closing due to greedy PBM practices, impacting proximity and access to medications for Iowans. The DRUG Act will put downward pressure on prescription drug prices and insurance premiums by removing the incentive for PBMs to drive up the list price of medications.”

“The ridiculously high cost of prescription drugs in the United States places an overwhelming financial burden on millions of Americans, forcing many to skip doses, ration medication, or forgo treatment altogether,” said Rep. Barragán. “Pharmacy Benefit Managers (PBMs) contribute to high drug costs because they are incentivized to steer patients towards drugs that are more profitable for PBMs, but may be less clinically effective for consumers. This broken system disproportionately harms low-income individuals, seniors, and those with chronic illnesses who rely on life-saving prescriptions to manage their health. That is why I am proud to join Rep. Miller-Meeks in reintroducing the DRUG Act, which would delink PBM compensation from the price of the drug and ensure they are only paid a flat fee for their services. This reform is an important step towards increasing access to affordable medication and ensuring patients do not have to choose between paying for essential medication or basic necessities.”

“When it comes to PBMs, there’s little to no transparency on their practices, and they’re making a lot of money by dictating what their competitors are able to make,” said Rep. Malliotakis. “Because of this, ‘Mom & Pop’ pharmacies in my district are being crushed, and the costs are being passed down to consumers. I’m proud to join my colleagues in introducing this critical piece of legislation which cracks down on the exploitative pricing techniques of PBMs and works to make pharmaceuticals more affordable.”

“I hear all too often from constituents telling me how they are forced to ration their medicines — even cutting their pills in half — or foregoing their medication all together due to skyrocketing costs,” said Rep. Schneider. “We must address the drug affordability crisis in America, and that requires addressing the role of pharmacy benefit managers (PBMs). These insurance middlemen are central in deciding which drugs are covered and how much they cost patients. We need to fix the broken incentive structures that irrationally reward PBMs for prioritizing costly drugs and limiting access to critical medications. I am proud to support the DRUG Act, which will de-link the revenue PBMs make from the cost of drugs, putting downward pressure on prices and making medicine more affordable for those who need it.”

“Pharmacy benefit managers (PBMs) are putting rural pharmacies out of business and driving up the cost of prescription medications,” said Rep. Allen. “The DRUG Act puts an end to PBMs’ manipulative payment models—which will save taxpayers billions, ensure pharmacies are reimbursed transparently and fairly, and establish effective oversight of PBM tactics that threaten patient access to health care. I am proud to co-lead this bill to strengthen Americans’ access to affordable, lifesaving drugs.”

“Americans deserve access to quality health care and affordable prescription drugs,” said Rep. Norcross. “Families in South Jersey and across the country are crying out for relief from high prescription drug prices. The DRUG Act reins in prescription drug prices by removing the incentive for pharmacy benefit managers to drive up costs, increasing transparency and prioritizing patients over profits.”

“PBMs increase health care costs by driving up prescription drug list prices, forcing patients to pay more at the pharmacy counter and making it more difficult for manufacturers to offer affordable health care benefits,” said Charles Crain, Managing VP of Policy at National Association of Manufacturers. “Manufacturers commend Rep. Miller-Meeks and her colleagues for re-introducing the DRUG Act, which will rein in PBMs operating in the commercial market by removing their perverse incentive to maximize their own profits at the expense of manufacturers and manufacturing workers.”

Background:

At a December 2024 bipartisan, bicameral press conference, Miller-Meeks and Iowa pharmacist John Nicholson called for urgent action on PBM reform.

PBMs are a growing faction in the distribution and payment ecosystem for prescription medicines. As the entity between pharmaceutical companies and pharmacies, PBMs initially played a key role in reducing prescription medicine costs and increasing access and affordability for Americans. Unfortunately, PBMs have grown and vertically integrated to the point where the three largest PBMs control over 80% of prescriptions, up from 30% in 2010. Their modern-day practices of driving up list prices to extract higher rebates for formulary placement are occurring at the expense of patients in the form of higher insurance premiums and higher prescription drug costs.

PBMs often bill patients more than what they pay to the pharmacy for medicines and keep the difference, enriching themselves instead of the patients they are supposed to benefit. This business practice, known as spread pricing, adds opacity to a supply chain that needs transparency. PBMs have attempted to rebrand spread pricing, calling it “risk mitigation pricing,” and contending that it provides predictability for plan sponsors and lowers drug cost.