On May 1, 2025, HealthyWomen will host its second “Capitol Conversations,” a new policy initiative that will bring together leading healthcare providers, patients and policymakers to examine relevant issues in women’s health. This event will explore PBM reform.
Americans don’t agree on much these days, but you’d be hard pressed to find anyone who would say no to paying less for their prescription drugs.
High out-of-pocket costs for drugs hit women especially hard: The CDC reports that 71% of women take prescription medications compared with just 58% of men, a gap that’s especially pronounced among midlife women.
As a champion for women’s health, I am particularly concerned that women will struggle to afford their medications, and their health will suffer as a result. When women’s health suffers, families, communities — and our nation — suffer, too.
But, unlike the sun rising tomorrow, it’s not a given that patients’ out-of-pocket medication expenses must rise. Congress could prevent these harms by addressing one of the contributors to rising out-of-pocket pharmaceutical costs: pharmacy benefit managers (PBMs), the middlemen between drugmakers and health insurance companies.
PBMs control virtually every aspect of prescription drug access and affordability. They administer drug benefits for health insurance companies and employers. They effectively control what drugs are covered — and at what cost — by setting preferred drug lists and negotiating rates with drug manufacturers and pharmacies.
The idea behind PBMs was to drive down drug prices by negotiating on behalf of insurers, yet a majority of PBMs themselves have become 800-pound gorillas. Just three PBMs process approximately 80% of pharmacy drug claims in the United States. That level of market power has enabled PBMs to negotiate discounts with drugmakers, but they don’t necessarily pass those savings on to the consumer.
Research shows that consumers’ out-of-pocket costs for medications rose nearly 6% per year between 2016 and 2020, while negotiated rates remained flat. Worse, pharmacy list prices rose even more (9%), which matters because consumers often pay coinsurance (a percentage of costs) calculated as a share of the drug’s list price, not the negotiated price.
It is not surprising, then, that more than half of all Americans worry about being able to afford their medications, with 1 in 4 saying they struggle to pay for their prescriptions and nearly 1 in 3 reporting not filling a prescription or otherwise stretching them due to cost, according to KFF.
PBMs aren’t the only source of affordability challenges, but their influence has steadily increased since their inception. PBM fees are typically tied to the original list price of a drug, even though PBMs often negotiate discounts and rebates that make their net price lower. You only need to imagine PBMs as a salesperson working on commission to understand their incentives: The more you spend, the bigger their payday.
Another common PBM practice is “spread pricing,” where the PBM bills the insurance company for a patient’s prescription more than it pays the pharmacy to fill that prescription. The PBM pockets the difference (“the spread”), locking in hefty profit on each prescription.
Though healthcare has historically been politically divisive, there’s a surprising level of bipartisan support for some basic common-sense reforms when it comes to PBMs. Congress must finish the job and should seize the opportunity to do something everyone — but especially the women in their lives — will benefit from.
Leaning into that bipartisanship, the upcoming budget reconciliation provides an opportunity for lawmakers to finally pass meaningful PBM reform in healthcare that saves real money for patients, their families, employers and the overall healthcare system. To make an impact, reform requires changes to how PBMs can earn fees, such as charging for their services instead of tying their fees to the list price of each drug. This policy — called “delinking” — would address PBMs’ financial incentive to keep list prices high or favor higher-priced Medicare Part D drugs. In turn, PBMs would be freer to pass savings on to consumers.
New rules should also limit spread pricing, which would potentially lower insurance company costs. In turn, that could yield lower premiums for consumers.
Finally, PBMs must be required to provide a level of transparency into how they charge health plans and what they pay pharmacies that we simply don’t have now. That way, hidden fees would be harder to get away with, and PBMs could feel greater incentives to use fair pricing practices. Sunlight, as they say, is the best disinfectant.
Critics of transparency requirements suggest that exposing PBM practices could embolden drugmakers and make them less willing to give price concessions. These critics also object more generally to forcing PBMs to disclose proprietary information.
Unfortunately for the critics, that argument falls apart when you consider that transparent PBMs like AffirmedRx already exist and are doing quite well. With a business model that offers full transparency around costs and passing the savings directly onto patients, these companies are proving that reform not only works for the patients, but it can work for the companies as well.
When you’re arguing against transparency, I think it’s pretty clear that you may be on the wrong side of things.
On behalf of the women I represent and advocate for, I urge Congress to finally pass comprehensive PBM reform, including Medicare Part D delinking and transparency requirements, as part of the budget reconciliation. While on its face it may not seem like this is a women’s health issue, but remember that women are patients, they are caregivers, and they are the chief medical officers for their families, making the lion’s share of healthcare decisions.
By helping women and their families access treatments they need, Congress has a real opportunity to demonstrate their commitment to improving access to essential treatments and ensuring that no woman has to choose between her family’s health and their financial well-being.
Beth Battaglino is CEO of HealthyWomen and a registered nurse who specializes in maternal child health.
