November 13, 2023
Dear Member of Congress:
As a leading trade organization representing small- and medium-sized American businesses, the American Free Enterprise Chamber of Commerce (AmFree Chamber) is dedicated to advancing the principles of free enterprise, free markets, limited government, and American leadership globally.
Our member businesses, like every American household, are struggling to fund employee healthcare plans, including prescription drug coverage. We appreciate Congressional efforts thus far this year aimed at lowering our healthcare costs, and we write to urge you to swiftly pass meaningful reforms of pharmacy benefit managers – or PBMs – to lower out-of-pocket costs for prescription drugs for consumers and for those of us providing health benefits for America’s workers.
We strongly support S. 1542 / H.R. 6283, the Delinking Revenue from Unfair Gouging (DRUG) Act which would delink PBM compensation from drug costs in the commercial market. By de-linking PBM revenues from drug prices, PBM middlemen will no longer be incentivized to steer their clients and consumers toward higher-priced medicines and restrict access to less expensive generics and biosimilars.
Additionally, the DRUG Act includes several other reforms to address PBM marketplace abuses:
• Bans ‘spread pricing,’ when a PBM charges the health plan more than they paid for a medicine;
• Prohibits PBMs from paying affiliated pharmacies more than independent community pharmacies for the same services; and
• Bans ‘patient steering,’ when a PBM encourages or requires patients to use its affiliated pharmacies instead of a pharmacy that is most convenient for them.
PBMs’ obscure fees and schemes have been negatively impacting our out-of-pocket costs for and access to medications for years. Although PBMs will tell you that they are benefitting employers and employees, highlighting data that may imply that they are lowering drug costs, the reality we face proves otherwise. The consumer price index for pharmaceuticals decreased from 2008 to 2019 and, in the CPI ending May 2022, drug prices increased by only 1.9%. Despite these facts, employers’ health care costs increase year after year, and consumers out-of-pocket at the pharmacy counter remain unacceptably high. This is because middlemen PBMs continue to exploit our nation’s opaque and anti-competitive prescription drug distribution system in order to line their pockets.
By advancing legislation that aims to increase transparency, competition, and value in the PBM marketplace, Congress can help ensure our drug pricing system benefits patients, not PBMs. Policies that ensure PBM profits re de-linked from the cost of medications and that available savings in the pharmaceutical supply chain reach the patient and plans are critical.
The PBMs are desperate to stop such reforms because these efforts will rein in the practices that have made these middlemen – the three large companies that control 80% of the drug prescribing market – some of the most profitable corporations in the world.
American businesses and American workers urge you to advance these reforms by the end of this year. We all will benefit when we make the system work for patients and reduce prescription drug costs.
Thank you,
Gentry Collins, CEO
American Free Enterprise Chamber of Commerce