Today, Americans are being forced to choose between their prescription medicines and financial wellbeing. Nearly 30% of Americans say they haven't taken their medication as prescribed due to unaffordable prices. This is especially impactful for Americans who take biologics, some of the most expensive drugs in the world, that treat many chronic diseases, like cancer, diabetes, arthritis, psoriasis, and more.
Fortunately, an immediate commonsense solution to this problem is available. One year ago, I urged Congress to pass comprehensive pharmacy benefit manager (PBM) reform. By reforming the PBM Monopoly, policymakers can lower drug costs by making biosimilars available to American patients that need them. Biosimilars are next-generation versions of biologics that are FDA-approved, safe, effective, and up to 50% lower-cost.
This solution is simple. If Congress reforms the PBM Monopoly in favor of a system based on free market competition, biosimilars will be far more widely available and provide hard-working Americans a lower-cost treatment option. Biosimilars also force biologic prices down through pro-business, pro-consumer competition.
The Trump Administration has taken critical, decisive steps to make biosimilars more available, and we applaud these important efforts. But Congress hasn’t acted, and the problem is intensifying.
The lack of action in Congress has empowered the PBM Monopoly to remain as strong as ever.
The three largest PBMs control more than 80 percent of the prescription drug market. This is unacceptable. American patients and providers, not major PBM conglomerates, should decide which treatment is best for them.
PBMs’ anticompetitive and inflationary business practices are well-documented and lead to higher prices at the pharmacy counter. Specifically, the GOP-led House Oversight Committee, bipartisan leadership of the Senate Finance Committee and federal regulators at the Federal Trade Commission (FTC) have each separately found that PBMs inflate drug prices and deny access to lower-cost drugs. In particular, recent findings from the FTC are jarring: The agency found PBMs hiked the prices of specialty drugs by thousands of percent to generate $7.3 billion in revenue, all while Americans were burdened with skyrocketing costs.
The case for PBM reform has never been stronger. While the Trump Administration has taken positive and decisive steps on PBMs—from the Executive Order requiring transparency from PBMs to the President himself directly calling out PBM’s anticompetitive conduct—it’s now time for Congress to step up and deliver meaningful legislation to reign in the PBM Monopoly and immediately begin lowering costs for Americans at the pharmacy counter.
Paragon Health Institute recently released a report noting the importance of the FDA aligning its biosimilars approval process with scientific evidence to bring more biosimilars to Americans more quickly. The report Platinum-Standard Science: FDA’s New Streamlined Framework for Biosimilars and Interchangeabilityhighlights that the FDA is working to retire outdated standards to “expand access and increase competition, benefitting patients and the health system overall.”
There is additional urgency as America faces a ‘biosimilars void.’ Of the nearly 120 biologics set to lose patent protection over the next decade, only 10% have a biosimilar in development. This void is anti-innovation and detrimental to American patients.
American can enter a Golden Age of Affordable Prescription Drugs through research and development for biosimilars that will treat new disease states and provide needed cures for more Americans. But the PBM Monopoly is holding this market hostage from the American people.
It is long-overdue for Congress to seize this opportunity to deliver a commonsense solution to out-of-control drug costs. Americans cannot continue to bear the brunt of an exploitative PBM Monopoly that burdens them with less options and higher prices.
Juliana Reed is the executive director of the Biosimilars Forum.
