Voters Want Affordability. Here's the Agenda That Actually Delivers.

Every election cycle, candidates promise to lower healthcare costs. What's missing is a straight answer about who's standing in the way, and what it would actually take to fix it.

Here's the encouraging part: Lawmakers from both parties have spent years scrutinizing pharmacy benefit managers (PBMs), and the verdict has been remarkably consistent: the current system isn't working, and the middlemen running it need to be held accountable.

PBMs sit between drug manufacturers and patients, ostensibly to control costs. In practice, they often drive costs up. Their revenue comes largely from rebates tied to a drug's list price, so the higher that price, the bigger the payout to the middleman. Because PBMs and their vertically integrated insurance parent companies also control drug formularies, they can steer patients away from cheaper generics and biosimilars, even when those options would save patients and employers money. The incentives reward higher prices, not better care.

The House Energy and Commerce Committee's Subcommittee on Health recently held a hearing on how PBM practices drive up costs for employers and patients alike - members on both sides condemned the lack of transparency and competition: Chairman Brett Guthrie (R-KY) pointed out that rebates meant to help patients are instead flowing to group purchasing organizations, arguing that transparency is the starting point. Rep. Debbie Dingell (D-MI) took aim at unchecked vertical integration, warning that consolidation is letting large corporations buy up the drug supply chain, profit from taxpayer dollars, and leave patients and independent providers behind.

When the Department of Labor closed the comment period on its proposed PBM fee disclosure rule, more than 560 comments came in, with over 80% (and more than 180 stakeholders) backing greater PBM transparency.

Lawmakers don't need to start from scratch. States have already tested several reforms and the results are in – these reforms lead to real results:

• Delinking PBM pay from drug prices. PBMs should be compensated through a flat, market-based fee for their services, not rewarded for pushing costs higher. Research from the USC Schaeffer Center for Health Policy & Economics found that such reform could meaningfully reduce annual U.S. drug spending.

• Real transparency. States and employers that contract with PBMs have been left in the dark for too long. One survey found three in five employers believe their PBM contracts are needlessly complex and tilted in the PBM's favor. PBMs should disclose acquisition costs, all revenue streams, affiliate relationships, and the full terms of deals struck on patients' and employers' behalf. New York, Michigan, Texas, and Oklahoma have already passed meaningful transparency laws.

• Ensuring savings reach patients. West Virginia became the first state to remove PBMs from its Medicaid managed-care program entirely, switching to a fee-for-service model that eliminated spread pricing. The state had projected roughly $30 million in annual savings. The actual first-year result came in at $54.4 million, according to the state's own Bureau for Medical Services, with another $122 million flowing directly to West Virginia pharmacies.

• Ending exploitation of the 340B program. The 340B drug discount program exists to help low-income patients access affordable medicine, but PBMs are affiliated with nearly 70% of the pharmacies that participate, diverting funds meant for patients and adding new barriers to access. The stakes became concrete this spring, when three major health systems, Mount Sinai, University of Michigan Health, and University of Kansas Health System, filed federal lawsuits accusing CVS Health of secretly withholding roughly $250 million in 340B savings between 2020 and 2025. Rather than expanding a framework this easily gamed, policymakers should mandate transparency, prevent PBMs from profiting off the program, and ensure the savings reach the patients it was designed for.

• Injecting real competition. The PBM reverse auction – which replaces opaque, take-it-or-leave-it pricing with a transparent bidding process where PBMs compete head-to-head for a state's business – has a strong track record, saving Colorado $6 to $10 million annually; Minnesota more than $28 million; New Hampshire $22 million; and New Jersey, the first state to adopt the model, an estimated $2.5 billion over five years. Ohio, Louisiana, and Maryland have passed legislation to follow suit.

  
  

Voters this cycle are asking a simple question: why are my healthcare costs so high? The PBM reform agenda is bipartisan, proven at the state level, and already saving money. The only question left for candidates on the ballot is whether they're willing to act on it.