I’m thrilled to sit down with James Maitland, a seasoned expert in healthcare policy and pharmaceutical regulation, with a deep focus on the complex world of pharmacy benefit managers (PBMs) and drug pricing reforms in the United States. With years of experience analyzing the intricacies of the drug supply chain, James offers a unique perspective on the bipartisan efforts to tackle rising medication costs and the powerful role PBMs play in that equation. In this conversation, we’ll explore the inner workings of PBMs, the motivations behind recent legislative pushes for reform, the specifics of a key bipartisan proposal, and the potential impact on patients and the healthcare system as a whole.
Can you start by breaking down what Pharmacy Benefit Managers, or PBMs, do in the drug supply chain and how they influence the cost of medications for everyday people?
Absolutely. PBMs act as middlemen between drug manufacturers, insurance companies, and pharmacies. Their primary role is to negotiate prices and rebates with drugmakers on behalf of insurers and employers, decide which drugs get covered on formularies, and manage prescription benefits for health plans. Ideally, they’re supposed to lower costs by leveraging their bargaining power. But here’s the rub: their business practices, like retaining a portion of rebates or favoring certain drugs over others, can drive up costs at the pharmacy counter for patients. Many argue that instead of passing savings on, some PBMs prioritize profit, which can leave patients paying more out of pocket, especially for specialty medications.
Why have PBMs become such a focal point for lawmakers in Washington lately?
PBMs have landed in the crosshairs because they wield enormous control over the drug market—especially the “Big Three” that handle about 80% of prescriptions in the U.S. Lawmakers are concerned about practices like vertical integration, where PBMs are owned by major insurers and linked to pharmacies, potentially steering patients to in-house options and inflating costs. There’s also frustration over a lack of transparency in how they operate, like how much of the rebates they negotiate actually reach patients. Both parties see reining in PBMs as a rare chance to address drug affordability without getting bogged down in partisan fights.
Can you walk us through the bipartisan PBM reform package that’s being reintroduced in Congress?
Sure. This legislation, championed by key senators, aims to overhaul how PBMs operate, particularly in government programs like Medicare and Medicaid. One big change is in Medicare Part D, where it would unlink PBM compensation from drug rebates, requiring them to be paid a flat fee instead and pass all negotiated savings directly to plan sponsors. It also bans a practice called “spread pricing” in Medicaid, where PBMs charge health plans more for a drug than they reimburse pharmacies, pocketing the difference. Plus, it demands more data transparency from PBMs to regulators and clients. The goal is to realign incentives so the focus shifts to lowering costs for patients rather than maximizing profits for middlemen.
This bill came close to passing last year but didn’t make it. What derailed it back then?
It was a frustrating near-miss. The reform package was initially tucked into a larger appropriations bill, which seemed like a sure path to passage. But it got stripped out at the last minute due to a combination of political pressures. Public opposition from a high-profile figure tied to the administration at the time played a significant role in shifting momentum against it. There were also broader concerns about the scope of healthcare provisions in the bill, and ultimately, the PBM reforms were sacrificed to get the funding package across the finish line. It was a stark reminder of how even bipartisan efforts can stumble in the final stretch.
What’s the outlook for this renewed push to pass PBM reform, in terms of timing and potential hurdles?
The timeline is tight but promising. The plan is to reintroduce the package soon, though “soon” in congressional terms could mean weeks or a couple of months. There’s talk of attaching it to must-pass funding legislation, possibly by the end of this year or early next, since Congress faces a deadline to pass new appropriations by late January. The bipartisan support is a strong tailwind, but hurdles remain—opposition from industry lobbyists, competing legislative priorities, and the risk of political gridlock could slow things down. Still, the urgency around drug costs might keep this on track.
How are different stakeholders reacting to these proposed changes to the PBM system?
Reactions are mixed but telling. Pharmacist groups and patient advocates are largely in favor, seeing this as a step toward fairness and transparency that could ease the burden on patients and independent pharmacies. On the other hand, PBMs and their lobbyists have pushed back, arguing they’re already the ones fighting for lower prices by negotiating with drugmakers. Drug companies seem quietly supportive of the focus on PBMs, likely because it shifts scrutiny away from their own pricing practices. It’s a complex web of interests, and each group is trying to shape the narrative to their advantage.
If these reforms do pass, what’s the likelihood they’ll actually bring down drug costs for patients at the pharmacy counter?
That’s the million-dollar question. The intent is to lower costs by changing how PBMs are paid and ensuring savings are passed through, but the real-world impact isn’t guaranteed. Some experts believe it could make a dent, especially for Medicare and Medicaid beneficiaries, by reducing hidden fees and markups. Others are skeptical, pointing out that drug pricing is a tangled mess involving many players, and PBM reform alone might not move the needle enough. There’s also a risk that costs could shift elsewhere in the system. It’s a step forward, but not a silver bullet.
What’s your forecast for the future of PBM reform and drug pricing efforts in the U.S. over the next few years?
I think we’re at a turning point. The bipartisan momentum on PBM reform suggests we’ll see some changes enacted in the near term, especially if it gets tied to funding bills that can’t be ignored. But broader drug pricing reform will remain a battleground—there’s still deep disagreement on how far to go, whether it’s price controls or other measures. PBMs will likely adapt to new rules, and we might see more scrutiny on other parts of the supply chain, like manufacturers. My forecast is cautious optimism: progress on transparency and accountability is coming, but the fight for truly affordable drugs will be a long haul.
