Healthcare in the Lame Duck
Lawmakers have returned to Washington for what many observers predict will be a subdued lame duck session. With former President Donald Trump set to return to the White House in January 2025 and Republicans poised to control both chambers of Congress in the new session, the current Democratic-led Congress faces tough decisions about which healthcare priorities can realistically advance before the year ends. Given these shifting dynamics and a continuing resolution set to expire on December 20th, many healthcare stakeholders are closely watching to see if a handful of critical policies—ranging from Medicare telehealth extensions to community health center funding—will receive even short-term relief.
Multiple programs tied to patient access and affordability are slated to expire on December 31, 2024. These include expanded Medicare telehealth flexibilities, community health center (CHC) funding, and measures preventing Medicaid Disproportionate Share Hospital (DSH) payment reductions. Efforts to stabilize Medicare physician payments, address pharmacy benefit manager (PBM) practices, and implement site-neutral payment reforms are also on the table. However, the political uncertainty, combined with constrained legislative days and an incoming administration that may set different healthcare priorities, create a complex landscape for deciding which items are addressed before the new year.
The Broader Political Context
The upcoming change in leadership is already influencing legislative calculations. Republicans, who will soon have unified control in 2025, may choose to defer major reforms or costly extensions until they can shape policy more extensively under the incoming Trump Administration. Analysts suggest that lawmakers will likely focus on minimal, must-pass measures to keep essential programs afloat while leaving more sweeping changes to the next Congress.
Several sources point to a “lamer-than-usual” lame duck session, with meaningful healthcare legislation potentially limited to urgent deadlines. The December 20th government funding cutoff provides a possible vehicle for limited healthcare fixes. Short-term extensions—buying mere months, rather than years—are a likely reality. During this time, people living with chronic conditions, those receiving services at safety-net providers, and people living in rural areas risk seeing uncertainty in care continuity if Congress cannot secure even interim solutions.
The incoming administration’s planned appointments to health agencies and global health leadership changes could realign federal priorities. While the previous administration’s approach emphasized a strong response to public health emergencies, the incoming leadership has signaled greater skepticism toward traditional vaccine policies and may focus less on infectious disease prevention, shifting attention toward other areas of healthcare. As a result, the current Congress may feel pressure to secure patient protections now, anticipating policy moves in 2025 that could reduce certain resources or alter public health strategies.
Must-Pass Healthcare Extensions: Preserving Patient Access Before 2025
Medicare Telehealth Flexibilities
One of the most urgent healthcare priorities involves extending Medicare telehealth flexibilities set to expire on December 31st. Initially expanded during the COVID-19 public health emergency, these provisions have allowed Medicare beneficiaries—including those in rural and underserved communities—to receive certain types of care without the geographic and site restrictions that once applied. The expansion has played a significant role in maintaining continuity of care, especially for behavioral health and chronic disease management services. A House Energy & Commerce Committee proposal would extend these provisions for two years, enabling policymakers to gather more data on telehealth’s cost and quality impact.
A permanent expansion faces a cost barrier. While telehealth enjoys bipartisan support, the price tag remains a challenge to achieving a long-term fix. Thus, a short-term extension appears the most likely outcome. If Congress allows the telehealth provisions to lapse, people who have integrated virtual visits into their healthcare routines—particularly for managing conditions such as HIV—might lose access to services they have come to rely on. This would create new hurdles for maintaining adherence to treatment regimens and managing ongoing care.
Medicare Physician Payment Stabilization
Another pressing issue involves Medicare physician payment rates. Under the current trajectory, doctors face a 2.83% pay cut in 2025—a continuation of multiple consecutive years of reimbursement reductions. Physician groups and bipartisan coalitions in Congress support a Medicare payment stabilization bill that would offset these reductions. Yet cost considerations and the search for budgetary offsets loom large.
Some policymakers view site-neutral payment reforms—discussed later—as a potential “pay-for” to fund these physician payment patches. The prospect of linking physician payment relief with spending cuts elsewhere may shape what Congress accomplishes now. Without a temporary fix, physicians in rural and lower-resource areas might limit the number of Medicare beneficiaries they see, potentially shrinking access to care just as winter months and other public health challenges approach.
Community Health Centers and Safety-Net Providers
CHCs, serving roughly 31 million people, face potential disruptions if their funding authorization expires at year’s end. According to George Washington University research, CHCs often operate on thin margins and rely heavily on federal support. Any gap in funding could mean reduced primary care services, delayed hiring or retention of medical staff, and less capacity to serve people who rely on these centers as their primary healthcare access point.
Medicaid DSH payments, which help hospitals serving people with lower incomes and those living in poverty, also face cuts. Without legislative action, an $8 billion reduction in DSH payments could take effect. Advocacy groups and hospital associations warn that this could erode crucial parts of the healthcare safety net, limiting services at facilities that care for populations disproportionately affected by chronic conditions and economic instability.
The lame duck session provides a narrow window to secure short-term extensions, preserving CHC and Medicaid DSH programs into early 2025. Lawmakers must balance competing priorities, including the need for cost offsets, making it uncertain whether robust, multi-year reauthorizations are possible. With Republicans waiting to implement their policy vision next year, the likely outcome may be modest stopgaps rather than a long-term solution.
Uncertainty for Other Key Programs: Ryan White and PEPFAR
Beyond the well-known year-end deadlines, advocates are also paying attention to larger federal programs that were previously reauthorized but now continue largely through appropriations. The Ryan White HIV/AIDS Program and the President’s Emergency Plan for AIDS Relief (PEPFAR) have historically enjoyed bipartisan support, delivering life-saving care, treatment, and prevention services for people living with HIV in the U.S. and abroad. However, as the next Congress and Administration look to reduce spending, longstanding programs that rely on continued federal investment but lack recent formal reauthorization could come under scrutiny.
Advocates fear that with a new majority eager to trim budgets and revisit healthcare spending priorities, both Ryan White and PEPFAR could face more critical examination. While no immediate action on these programs is expected in the lame duck session, their future stability may depend on how the incoming leadership chooses to address them in the months ahead. This uncertainty raises concerns in public health communities that rely on these programs to maintain progress in HIV prevention, treatment retention, and global health collaborations.
PBM Reform and Drug Pricing: A Fleeting Opportunity?
Pharmacy Benefit Managers have drawn increasing scrutiny from Congress for pricing practices that, according to some analyses, drive up medication costs and limit access to necessary prescriptions. There has been a rare display of bipartisan interest in addressing PBM transparency. The House-passed Lower Costs, More Transparency Act—referenced by Mercer—offers a framework for imposing new reporting requirements on PBMs and prohibiting certain practices like spread pricing in Medicaid.
Recent Federal Trade Commission (FTC) actions against the largest PBMs underscore these concerns. The FTC’s administrative complaint alleges that PBM rebating structures inflate medication costs, impairing access to more affordable alternatives. Policymakers, patient advocates, and public health officials have pointed out that PBM practices may particularly affect people living with HIV and other chronic conditions, who depend on stable access to medications. Restrictions like mandatory mail-order pharmacy rules can disrupt continuity of care, especially for those who require regular medication management.
Still, significant PBM reforms may not pass during the lame duck session. Republicans may prefer to tackle drug pricing and PBM oversight under their upcoming majority, potentially shaping legislation more to their liking. If any PBM-related measures pass now, they will likely serve as incremental changes or as offsets for other healthcare priorities rather than representing the comprehensive reform that some lawmakers and patient advocates seek.
Site-Neutral Payment Reforms: A Budgetary Lever
One of the most closely watched and potentially transformative policy changes up for discussion involves site-neutral payment reforms. Current Medicare regulations often allow higher reimbursements for services delivered at off-campus hospital outpatient departments compared to physician offices or ambulatory surgical centers. Hospitals justify these higher rates based on overhead and regulatory requirements, but policymakers, backed by advisors like the Medicare Payment Advisory Commission (MedPAC), have increasingly called for aligning payments across settings to reduce unnecessary spending.
According to Modern Healthcare reporting, robust site-neutral legislation could save over $100 billion over ten years. This makes the policy attractive as a funding mechanism—lawmakers can use those savings to pay for other priorities like extending telehealth, stabilizing Medicare physician payments, or preserving safety-net funding.
In previous Congresses, only modest site-neutral measures advanced. However, the political environment has changed. Analysts note that with a unified Republican government in 2025, policymakers may be more inclined to pass significant site-neutral reforms to secure long-term savings. During the lame duck session, a narrow measure included in the bipartisan Lower Costs, More Transparency Act—requiring site-neutral payments for certain drug administration services—could move forward as a pay-for. This smaller step might pave the way for broader reforms next year.
Hospitals, supported by the American Hospital Association, strongly oppose site-neutral policies, arguing these cuts would limit their ability to provide comprehensive services. Some advocates worry that reducing hospital outpatient department payments could disproportionately affect rural and underserved areas, threatening access to care if hospitals respond by consolidating or reducing less profitable services. Congress must weigh these concerns against the promise of substantial cost savings. Whether any notable site-neutral measures pass now or wait until next year remains uncertain.
The Upcoming Administration: Implications for Public Health Priorities
By early 2025, incoming administration appointees will shape federal healthcare priorities. As PBS NewsHour reports, the Administration’s picks signal possible skepticism toward established vaccine policies and a shift in public health approach, potentially reducing the emphasis on infectious disease prevention that guided previous eras. Meanwhile, experts warn that changes could weaken U.S. influence on global health initiatives.
This shifting focus could impact ongoing campaigns to address HIV and other chronic or communicable conditions. Without consistent federal direction and robust support, gains made under established programs may not be sustained. Advocates hope that at least some lame duck extensions can preserve the foundation of existing programs—like telehealth and CHCs—helping insulate vulnerable communities from policy swings that may come with new leadership.
Programs like Ryan White and PEPFAR, which have maintained strong bipartisan support in the past, could face new scrutiny in an environment where budget discipline and re-examining unreauthorized programs take center stage, potentially embroiling these critical pillars of HIV care and prevention in broader spending debates.
Navigating Short-Term Extensions and Long-Term Implications
Analysts predict a restrained legislative approach during the lame duck, with lawmakers likely settling for short-term solutions to avert immediate disruptions rather than enacting comprehensive reforms. This approach may feel unsatisfying to those seeking lasting certainty, but it can prevent sudden gaps in coverage and services while buying time to reassess priorities in 2025.
For example, a brief funding extension for CHCs or a short-term continuation of telehealth flexibilities could prevent abrupt care disruptions. Telehealth has already proven critical for expanding access to behavioral health services, and federal agencies have now taken further steps to preserve this access. The U.S. Drug Enforcement Administration (DEA) and U.S. Department of Health and Human Services (HHS) recently extended telemedicine flexibilities for prescribing Schedule II-V controlled substances through the end of 2025. This marks the third extension of pandemic-era policies that allow practitioners to prescribe controlled medications—such as suboxone (used in opioid use disorder treatment)—via telemedicine without an in-person evaluation. Retaining these flexibilities, even if temporary, helps sustain harm reduction efforts and essential treatment access for those managing substance use disorders.
A modest Medicare physician payment patch could also preserve provider participation while deeper structural reforms are debated. On the revenue side, modest site-neutral tweaks may generate savings to fund these stopgaps without forcing lawmakers to finalize wide-ranging changes immediately.
Meanwhile, Democrats have floated extending Affordable Care Act subsidies in a potential year-end health deal that also includes telehealth extensions and incremental improvements in physician reimbursements. Such proposals face uncertainty as Republicans prepare to take full control in 2025, but even short-term deals could maintain coverage gains and service expansions that benefit people managing chronic conditions and those relying on affordable insurance options.
Given the incoming administration’s focus on spending and efficiency, it may be prudent for stakeholders to identify areas where reducing waste, redundancy, or abuse is possible—particularly within large, long-standing programs. Offering proactive solutions aligned with fiscal priorities, while demonstrating that essential services remain intact, could help preserve support for programs like Ryan White. This approach allows advocates to show policymakers that sustained funding can go hand-in-hand with accountability and cost-effectiveness, paving the way for more secure, long-term access to critical healthcare services.
Actions for Advocates and Public Health Officials
Engage Legislators Before December 20th:
With deadlines looming, advocates can communicate the importance of even short-term extensions for telehealth, CHC funding, and Medicare physician payment stabilization. Stressing the immediate impact of allowing these programs to expire can help secure stopgap measures.
Highlight Evidence and Outcomes:
Data-driven arguments can persuade legislators that certain policies merit continued investment. For example, demonstrating that telehealth has improved access in rural areas or that CHCs reduce costly emergency department visits can make a compelling case for sustained support.
Prepare for 2025 Debates:
The new Congress will likely reassess programs ranging from telehealth expansions to broader HIV initiatives like Ryan White and PEPFAR. Advocates should cultivate coalitions and gather patient stories now, ensuring they can respond effectively to future proposals that may challenge established healthcare priorities. By proactively preparing data and first-person accounts, stakeholders can better influence upcoming debates.
Monitor Agency Leadership and Policy Shifts:
Staying informed about new federal health agency leaders and their public statements helps anticipate changes in priorities. Understanding where the Administration might diverge from past practice can help advocates and providers design strategies to maintain access and care quality—even if federal emphasis shifts away from certain public health initiatives.
Conclusion
December 2024 places the U.S. healthcare landscape at a turning point. The lame duck session unfolds under a cloud of political transition, with an incoming administration and unified Republican control set to reshape policy debates. Lawmakers face a stacked agenda of expiring programs and urgent healthcare needs but may opt only for minimal extensions that maintain the status quo for now.
Decisions made in these final weeks of 2024—from temporary telehealth fixes to short-term CHC funding—will determine how seamlessly care continues into the new year. As Congress weighs sites of service, physician reimbursements, PBM practices, and the future of critical programs like Ryan White and PEPFAR, advocates must remain engaged. The approaching shift in power and priorities adds urgency to even the smallest policy wins now, as they may offer a critical foundation to protect patient access and maintain progress on significant public health initiatives in a potentially more challenging political climate.
FTC Sues Major PBMs for Unfair Practices Affecting Drug Costs
Pharmacy Benefit Managers (PBMs) have long been influential yet often obscure intermediaries in pharmaceutical pricing and distribution. They negotiate drug prices with manufacturers, develop formularies for health plans, and manage pharmacy networks. Today, the three largest—CVS Caremark, Express Scripts, and OptumRx—control about 80% of the market.
On September 20, 2024, the Federal Trade Commission (FTC) filed an administrative complaint against these major PBMs and their affiliated group purchasing organizations (GPOs). The complaint alleges that they engaged in anticompetitive and unfair rebating practices, artificially inflating insulin prices and impairing access to lower-cost alternatives.
The FTC's action marks a critical juncture in the struggle for fair drug pricing and access, emphasizing the need for robust enforcement and comprehensive PBM reform. The outcome could reshape the healthcare industry and significantly impact care across the United States.
The FTC's Case Against PBMs
The FTC alleges that PBMs have engaged in anticompetitive and unfair rebating practices that have artificially inflated the list prices of insulin and other essential medications. Grounded in Section 5 of the Federal Trade Commission Act, which prohibits unfair competition and deceptive practices, the FTC asserts that PBMs' rebate strategies and patient steering harm consumers and competition.
For example, the list price of Humalog, a widely used insulin product, increased from $21 in 1999 to over $274 in 2017—a rise of more than 1,200%. The FTC argues that this dramatic inflation is linked to PBMs' "chase-the-rebate" strategy, where they demand larger rebates from manufacturers in exchange for favorable formulary placement.
Another key aspect of the complaint focuses on patient steering practices. The FTC alleges that PBMs have systematically excluded lower-cost insulin alternatives from their formularies in favor of higher-priced options that generate larger rebates. This practice limits choice and forces many to pay more out-of-pocket for their medications.
Rahul Rao, Deputy Director of the FTC's Bureau of Competition, emphasized: "Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed."
The FTC seeks to fundamentally change how PBMs operate. The complaint aims to prohibit PBMs from excluding or disadvantaging lower-cost versions of drugs, prevent them from accepting compensation based on a drug's list price, and stop them from designing benefit plans that base out-of-pocket costs on inflated list prices rather than net costs.
FTC Chair Lina Khan stated, "The FTC's administrative action seeks to put an end to the Big Three PBMs' exploitative conduct and marks an important step in fixing a broken system—a fix that could ripple beyond the insulin market and restore healthy competition to drive down drug prices for consumers."
Impact on People Living with HIV
While the FTC's case primarily focuses on insulin pricing, PBM practices significantly affect people living with HIV (PLWH) and other chronic conditions. Recent cases highlight the challenges faced in accessing affordable medications due to PBM and insurer practices.
In April 2024, CVS Health failed in its latest attempt to dismiss a class action lawsuit alleging discrimination against PLWH by requiring them to receive medications via mail order, limiting access to essential pharmacy services and counseling. U.S. District Judge Edward Chen noted that CVS was on notice that this program could likely discriminate against PLWH, as plaintiffs had repeatedly requested to opt out.
In another case, the U.S. Department of Health and Human Services Office for Civil Rights (OCR) closed a complaint without penalties against Blue Cross Blue Shield of North Carolina (BCBS NC) after the insurer lowered the pricing tier for HIV medications. The original complaint alleged that BCBS NC had placed almost all HIV antiretroviral medications, including generics, on the highest-cost prescription tiers.
While BCBS NC changed its formulary, the lack of penalties raises concerns about enforcement and accountability. Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, expressed disappointment: "It was incredibly disheartening and deeply concerning to see them let the state's largest insurer get away with such blatant discrimination."
These cases illustrate how PBM practices and insurer policies create significant barriers to care for people living with HIV. High out-of-pocket costs, restricted pharmacy access, and discriminatory formulary designs can lead to medication non-adherence, resulting in adverse health outcomes and increased healthcare costs in the long term.
In North Carolina, about 37,000 people are living with HIV, with Black people representing 58% of new HIV diagnoses despite being only 22% of the state's population. Nationally, according to the Centers for Disease Control and Prevention (CDC), approximately 1.2 million people in the United States are living with HIV. PBM practices that inflate drug costs or limit access exacerbate these disparities and hinder efforts to end the HIV epidemic.
PBM Practices Under Scrutiny
The FTC's complaint has brought controversial PBM practices into sharp focus, highlighting concerns long raised by patients, healthcare providers, and policymakers.
The FTC's interim staff report reveals that PBMs often prioritize higher rebates over lower net prices, leading to exclusion of lower-cost alternatives and driving up drug prices—a practice known as "rebate walls." Patient steering directs consumers to PBM-owned pharmacies, limiting choice and disadvantaging independent pharmacies.
A Congressional hearing in July 2024 further exposed these issues. PBM executives faced tough questioning about their role in rising prescription drug costs. Lawmakers pressed the executives on how PBMs have monopolized the pharmaceutical marketplace and pushed anticompetitive policies that undermine local pharmacies and harm patients.
Representative Virginia Foxx (R-N.C.) highlighted the lack of transparency, questioning PBM executives about the pass-through of rebates and fees to plan sponsors. The executives' responses did little to clarify the complex and opaque financial flows within the PBM industry.
PBMs defend their practices as necessary for managing drug costs. Phil Blando, Executive Director for Corporate Communications at CVS Caremark, stated, "We work to negotiate the lowest net cost for drugs... driving better health outcomes and lower out-of-pocket costs for consumers." However, critics argue that these claimed benefits are not reflected in patient experiences or overall drug pricing trends.
Real-World Impact on Patients and Pharmacies
Jeremy G. Counts, PharmD, a spokesperson for Pharmacists United for Truth and Transparency (PUTT), explains that the vertical integration of the Big Three PBMs allows them to limit access through restrictive networks, under-reimbursement, and aggressive patient steering. These practices harm independent pharmacies and jeopardize health by disrupting continuity of care.
Restrictive Networks and Steering: PBMs often require patients to use their own pharmacies, frequently through mail order, misleading them into believing they have no other options. Even when plans allow the use of independent pharmacies, PBMs make it tedious to opt out, effectively limiting choice.
Under-Reimbursement and Clawbacks: Independent pharmacies that serve patients despite low reimbursements face financial strain. PBMs may pay below cost or use fees and recoupment methods to claw back margins, forcing some pharmacies to turn away patients.
Barriers to Medication Access: PBMs impose onerous prior authorization processes for medications that do not provide them with high rebates, delaying care and increasing costs. Counts notes that this has become a deadly issue in oncology care.
Aggressive Patient Pursuit: For profitable medications, PBMs aggressively pursue patients and their prescriptions, sometimes transferring prescriptions without permission or shipping medications without their knowledge.
These practices not only harm independent pharmacies but also jeopardize health by disrupting access to necessary medications.
Healthcare consultant Rita Numerof calls the FTC's investigation a "pivotal moment" in reforming the industry to serve patients' best interests.
The Need for Enforcement
The lack of punitive action in cases like the BCBS NC complaint raises concerns about the effectiveness of current enforcement mechanisms. Carl Schmid of the HIV+Hepatitis Policy Institute pointed out, "Without action to improve federal and state regulation, oversight, and enforcement, such discriminatory practices will continue." The BCBS NC case demonstrates that while policy changes can be achieved through advocacy and complaints, there is often little consequence for discriminatory practices.
Counts emphasizes that "PBMs are masters at derailing legislative attempts to rein them in." He argues that FTC enforcement is critical, as PBMs often ignore laws unless compelled to comply. Counts asserts that attacking the problem from multiple fronts is essential, and FTC action provides immediate and targeted intervention.
PBM Response and Industry Perspective
In response to mounting scrutiny, PBM executives have defended their practices. During the July 2024 Congressional hearing, leaders from CVS Caremark, Express Scripts, and OptumRx maintained that they do not engage in patient steering or discriminatory practices. They argued that PBMs play a crucial role in negotiating lower drug prices and improving healthcare affordability.
David Joyner, president of CVS Caremark, stated, "We're making health care more affordable and accessible for the millions of people we serve every day."
However, these assertions have been met with skepticism. The House Committee on Oversight and Accountability, led by Chairman James Comer (R-Ky.), has accused PBM executives of making statements that contradict findings about self-benefitting practices.
Legislative Efforts: The Pharmacists Fight Back Act
In addition to regulatory actions by the FTC, legislative initiatives are crucial for comprehensive reform. The Pharmacists Fight Back Act (H.R. 9096), introduced by Representatives Jake Auchincloss (D-MA) and Diana Harshbarger (R-TN), aims to:
Establish Standard Pharmacy Reimbursement:
Proposes a reimbursement model based on the National Average Drug Acquisition Cost (NADAC) plus a state dispensing fee and an additional 2%. This model prevents underpayment to independent pharmacies and curbs price gouging by PBM-owned pharmacies.
Prohibit Predatory PBM Tactics:
Seeks to ban practices such as steering patients to PBM-owned pharmacies, exclusionary network designs, retroactive fees, spread pricing, and reimbursement clawbacks.
Mandate Rebate Transparency and Application:
Requires that 80% of all PBM-negotiated rebates and fees reduce patients' out-of-pocket costs, with the remaining 20% lowering insurance premiums.
Counts stresses the urgency of passing this legislation to save pharmacies and reduce drug pricing: "Its immediate passage is critical to stopping the pharmacy closure and drug pricing crisis in this country."
Potential Outcomes and Industry Impact
If successful, the FTC's action could reshape the pharmaceutical industry by forcing PBMs to prioritize lower net drug prices, benefiting patients with more affordable medications and increased pharmacy choice. A ruling against PBMs could set a legal precedent, opening the door for further regulatory action or private lawsuits against PBMs and other healthcare intermediaries.
Independent pharmacies stand to benefit considerably from potential reforms. If the FTC's action results in more transparent pricing practices and limitations on patient steering, these businesses may be better able to compete with PBM-owned pharmacies.
However, given PBMs' significant resources and influence, changes may be hard-fought and take time to implement. There is the possibility that PBMs may find new ways to maintain their market position and profitability.
Impact on Independent Pharmacies
Independent pharmacies are closing at an alarming rate—nine per day, with 2,275 closures so far in 2024. This trend reduces access to personalized care and diminishes competition, further consolidating PBMs' market power.
Counts conducted a study in Virginia, matching pharmacy closures against openings using data from the Virginia Board of Pharmacy. He found that "community pharmacies are closing at twice the rate they are opening, and this rate is accelerating." Without significant reform, including FTC enforcement and the passage of H.R. 9096, the pharmacy infrastructure in the United States will continue to erode.
Conclusion and Call to Action
The FTC's actions, along with legislative efforts like the Pharmacists Fight Back Act, are critical steps toward creating a fairer pharmaceutical industry that prioritizes access and affordability.
We urge readers to:
Stay Informed: Follow developments in PBM regulation and reform efforts.
Research Legislation: Contact your representatives to inquire about pending legislation.
Engage with Advocacy Groups: Support organizations like PUTT (www.truthrx.org) and the HIV+Hepatitis Policy Institute (www.hivhep.org).
Share Experiences: Raise awareness by sharing your experiences with PBM practices. PUTT is collecting stories to highlight the real-world impact of PBM practices. Visit their PBM Horror Stories page to share your story anonymously.
Collective action is essential to ensure meaningful and lasting change in drug pricing and access. The FTC's action is a significant step, but it's up to all of us to ensure this momentum leads to a more transparent, equitable, and patient-centered healthcare system in the United States.
Ripple Effect: How PBMs and Counterfeit Drugs Threaten Patients
The infiltration of counterfeit drugs into the legitimate pharmaceutical supply chain poses a significant risk to patient health and safety, particularly for those living with HIV. While counterfeit drugs are nothing new, the criminals threatening our safety have a surprising new ally: Pharmacy Benefit Managers (PBMs). A report by the Partnership for Safe Medicines unveils how criminal entities exploit vulnerabilities in the supply chain, made worse by PBMs, whose reimbursement policies often leave pharmacies on the edge of financial viability.
The fight against HIV/AIDS is significantly hindered by the infiltration of counterfeit medications into the pharmaceutical supply chain, an issue that transcends mere regulatory challenges or financial losses. It directly impacts the health and safety of people living with HIV (PLWH), undermining the global effort to manage and eventually End the HIV Epidemic.
A striking example of the severity of this issue is the investigation conducted by Gilead Sciences Inc., which was extensively covered by The Wall Street Journal. This investigation uncovered that over two years, a staggering 85,247 counterfeit bottles of Gilead's HIV medications Biktarvy and Descovy, valued at more than $250 million, had been distributed within pharmacies. These counterfeit products, the result of sophisticated criminal networks exploiting supply chain vulnerabilities, ranged from being filled with harmless over-the-counter painkillers to dangerous antipsychotic drugs, posing significant health risks to unsuspecting patients. “Harmless” is relatively qualified here because when PLWH are not receiving necessary antiretroviral medications, conditions can develop quickly with deadly consequences, medication resistance can bloom, and new transmissions can occur.
The presence of counterfeit medications not only endangers the lives of PLWH but also severely erodes trust within communities, particularly those that are already marginalized and financially strained. The breach in the supply chain security caused by these counterfeit drugs highlights a critical public health issue that demands immediate and concerted action from all sectors involved in healthcare delivery.
Addressing the Challenges Posed by Pharmacy Benefit Managers and Under-Reimbursement
PBMs are at the heart of growing scrutiny for practices exacerbating healthcare system challenges, notably impacting the economic viability of pharmacies, and facilitating the entry of counterfeit drugs into the supply chain.
Their primary role is to negotiate drug prices and manage prescription drug benefits on behalf of health insurers, under the guise of controlling costs and streamline the prescription process. The reality is, PBMs do not necessarily pass on “savings” to patients or plan sponsors and have, in truth, become a self-dealing entity working hard to maximize the profits of insurance company shareholders. PBMs often implement reimbursement policies that pay pharmacies less than the actual cost of acquiring and dispensing medications when those pharmacies are not owned by the PBM itself. This under-reimbursement pressures pharmacies, especially independent ones, to find ways to sustain their operations amidst shrinking margins. In other instances, PBMs offer higher reimbursement rates to their mail-order pharmacy and work hard to steer patients away from independent pharmacies.
This economic squeeze leads to a consequential gap in the market: the demand for medications that the legitimate supply chain cannot adequately supply at the prices set by PBMs. Counterfeiters exploit this gap, introducing fake or substandard medications into the supply chain and offering the fakes at a lower acquisition cost than legitimate wholesalers. The cycle perpetuated by PBM under-reimbursement practices not only undermines the financial stability of pharmacies but also compromises patient safety. Pharmacies, caught in the vise of financial pressures, may unknowingly procure medications from less reputable sources, inadvertently becoming conduits for counterfeit drugs. This situation is exacerbated in rural and underserved communities, where pharmacies are often the sole healthcare providers, making the impact of counterfeit medications even more devastating. These counterfeit drugs find their way into pharmacies struggling to balance financial viability with the provision of quality care. The allure of lower cost options in the face of under-reimbursement makes these counterfeit products dangerously appealing for pharmacists seeking to meet patient needs.
The financial strain on independent pharmacies due to PBM policies is further highlighted by the National Community Pharmacists Association's (NCPA) support for a class action lawsuit against Express Scripts. This legal action accuses Express Scripts and several smaller PBMs of colluding to manipulate reimbursement rates and impose higher fees on pharmacies, further squeezing their financial resources and compromising their ability to provide quality services.
American Pharmacy Cooperative, Inc. (APCI)'s initiative to engage Vanguard Inc., a significant investor in the conglomerates owning the "Big 3" PBMs, exemplifies the urgent need for systemic reform. This effort, celebrated by Pharmacists United for Truth & Transparency (PUTT), emphasizes the necessity of reforms that ensure transparency, fair reimbursement, and ethical conduct to safeguard the pharmaceutical supply chain.
Prescription Drug Affordability Boards (PDABs) and Their Impact
Prescription Drug Affordability Boards (PDABs) are quickly gaining popularity among states, being sold as an attempt to make healthcare more affordable. These boards, armed with the authority to scrutinize and cap drug prices, aim to shield the public from the soaring costs of essential medications. However, there's concern that these actions might limit access to medications for marginalized communities and create more challenges for pharmacies.
A recent webinar hosted by the National Minority Quality Forum (NMQF) brought to light the challenges PDABs face in balancing drug affordability with healthcare equity. Jen Laws, President and CEO of the Community Access National Network (CANN), voiced a critical perspective, highlighting the limitations of PDABs' current toolkit, which primarily revolves around setting upper payment limits. Laws pointed out, "The only tool that the PDABs have been provided is an upper payment limit, and they are not being encouraged to explore other tools or learn how to make investments into issues of health equity and access. When we take money out of systems, the people not represented lose out first." Few of these boards have patients appointed to them. This insight underscores the complexity of ensuring drug affordability does not come at the expense of access, particularly for those in marginalized communities.
Echoing this sentiment, Gretchen C. Wartman, Vice President for Policy and Program and Director of the Institute for Equity in Health Policy and Practice at NMQF, emphasized the need for PDABs to broaden their approach. "We must pursue efforts to ensure that PDABs are improving access to medicines, rather than constraining that access in the interest of financial risk mitigation," Wartman stated, advocating for a more holistic strategy that aligns drug affordability with comprehensive access to care.
The discussions surrounding PDABs, particularly highlighted in the NMQF webinar and our CANN blog, reveal a critical need for a nuanced approach to drug affordability that doesn't inadvertently compromise access or exacerbate vulnerabilities in the pharmaceutical supply chain. By focusing narrowly on upper payment limits (UPLs) as a primary tool for cost containment, there's a real risk of creating gaps in the medication supply that counterfeiters could exploit, further endangering patient safety and public health. This scenario underscores the importance of developing comprehensive strategies that not only address the immediate issue of drug costs but also consider the broader implications for healthcare equity, pharmacy viability, and the integrity of the medication supply chain. Policymakers and stakeholders must work collaboratively to ensure that efforts to control drug prices do not inadvertently introduce new risks, particularly for marginalized communities and the pharmacies that serve them.
A Legislative Response: The Florida Prescription Drug Reform Act
The Florida Prescription Drug Reform Act stands as a major legislative response to the pressing issues within the pharmaceutical supply chain, particularly addressing the detrimental practices of Pharmacy Benefit Managers (PBMs) that contribute to pharmacy under-reimbursement and indirectly foster an environment ripe for counterfeit drugs.
Focused Provisions:
Regulating PBM Operations: The Act mandates PBMs to obtain a certificate of authority, introducing a layer of accountability and transparency previously absent. This requirement aims to scrutinize and regulate PBM practices more closely, ensuring they operate in a manner that supports rather than undermines pharmacy financial stability.
Prohibiting Harmful Practices: Specifically targeting practices that have strained pharmacies, the Act prohibits PBMs from engaging in retroactive fee recoupments and spread pricing strategies. Such practices have historically placed pharmacies in precarious financial positions, making the supply chain vulnerable to counterfeit medications as pharmacies seek cost-saving measures.
Ensuring Fair Reimbursement: By enforcing a pass-through pricing model, the Act ensures that pharmacies are reimbursed the actual cost paid by the health plan to the PBM for medications. This approach directly addresses the issue of under-reimbursement, reducing the financial pressures that can lead pharmacies to inadvertently engage with dubious suppliers.
Implications for Supply Chain Security:
These targeted reforms within the Florida Prescription Drug Reform Act are designed to directly impact the economic pressures pharmacies face due to PBM policies. By ensuring more equitable and transparent reimbursement practices, the Act mitigates one of the key factors that have made the pharmaceutical supply chain susceptible to counterfeit drugs. It represents a significant step towards safeguarding pharmacies from the financial instability that can compromise patient safety and healthcare integrity.
In essence, the Act provides a comprehensive framework for other states and federal entities to consider, highlighting the importance of addressing PBM practices as a critical component of enhancing supply chain security and protecting patient health.
Advocating for Change: Strategic Policy Reforms and Mobilization
The challenges posed by PBMs, PDABs, and drug affordability impact not just the healthcare industry and policymakers but directly affect patients seeking affordable, safe medications. This underscores the urgency for a unified advocacy movement towards systemic reform. Drawing on the initiatives of groups like PUTT and APCI, as well as the framework set by Florida's Prescription Drug Reform Act, we have a clear path to advocate for transparency, equity, and patient access across healthcare.
Calls to Advocacy
Broadened Engagement with Policymakers, Investors, and the Public: Advocacy efforts must expand to encompass not just policymakers but also investors and the broader public. Echoing APCI’s engagement with Vanguard Inc., it's critical to advocate for investor responsibility in healthcare practices. Moreover, by leveraging the legislative model of Florida's Prescription Drug Reform Act, advocates can champion similar transparency and regulatory measures nationwide. This expanded advocacy should also include a focus on ensuring PDABs operate with a mandate that balances drug affordability with the need for access to innovative treatments.
Unified Support for Legislative and Regulatory Reforms: Stakeholders are encouraged to unite in supporting and proposing legislative initiatives that tackle the foundational issues of PBM reform and the effective operation of PDABs. Advocacy should push for laws that not only enhance drug pricing transparency and regulate PBM reimbursement rates but also ensure PDABs do not inadvertently limit access to essential medications for marginalized communities.
Active Participation in Rulemaking Processes with Strategic Alliances: Stakeholders should actively participate in the rulemaking process, forming strategic alliances to influence the regulations governing PBMs and PDABs. This collective action is vital in shaping policies that promote fair reimbursement practices, safeguard pharmacy access, and ensure PDABs contribute positively to healthcare equity.
Comprehensive Educational Campaigns to Foster Awareness and Action: Initiating educational campaigns that explain the roles and impacts of PBMs and PDABs in the healthcare system is essential. By incorporating success stories from state and federal legislative achievements and insights from advocacy efforts, these campaigns can underscore the benefits of reform for pharmacies, patients, and the healthcare system at large. The goal is to inform the public, inspire support for reform efforts, and motivate active participation in advocacy initiatives.
The path toward meaningful reform in pharmacy benefit management, drug pricing, and the equitable implementation of PDABs is fraught with challenges. Yet, the successes achieved in regions like Florida provide hope that meaningful reform is possible. By rallying for targeted policy reforms and engaging in proactive advocacy, we can drive systemic changes that ensure the pharmaceutical supply chain operates with transparency, equity, and a steadfast commitment to patient health. Together, we have the power to reshape the landscape of drug affordability and access, guaranteeing that all people receive the comprehensive care and medications they deserve.
Eye on 2024: Federal Action on PBMs, 340B, and Telehealth
2024 stands as a pivotal year in federal healthcare policy, potentially overshadowed by a highly contentious and partisan political landscape during an election year. The backdrop includes ongoing budget fights, looming cuts threatening vital healthcare programs, and a shifting balance of power in Congress thanks to at least one member being removed from office and a couple of high-profile resignations, further complicating the path to meaningful bipartisan legislation. Amidst this chaos, key focus areas such as reforms related to Pharmacy Benefit Managers (PBMs) and the 340B Drug Pricing Program, as well as telehealth expansion are at the forefront of potentially significant policy shifts, all while renewed attacks on the Affordable Care Act (ACA) add to the uncertainty of healthcare reform in an election year.
Pharmacy Benefit Managers: Pushing for Transparency and Market Reform
PBMs have come under increasing scrutiny in the U.S. healthcare system, particularly regarding their role in prescription drug pricing. Dominated by just three key players, PBMs face criticism for opaque pricing models and practices that may contribute to rising drug costs. The Lower Costs More Transparency Act of 2023 represents a bipartisan effort to enhance transparency in PBM operations, requiring detailed disclosure of pricing and costs. The future of this legislation depends on whether the Senate will adopt the House version or introduce its own bill, with several Senate committees recently advancing similar proposals.
Experts, including those from the Brookings Institution, caution that while increased transparency is a positive step, it may only modestly impact overall drug costs. The effectiveness of these reforms hinges on addressing the complex relationships among PBMs, drug manufacturers, insurers, and healthcare providers.
The current PBM model, often criticized for incentivizing high drug list prices through 'spread pricing,' is under review. Proposed reforms, like those in the Pharmacy Benefit Manager Reform Act, aim to eliminate spread pricing and ensure that rebates and savings directly benefit plan sponsors and patients.
Additionally, the PBM market's consolidation and “vertical integration” (or self-dealing by another name) raises concerns about market power and its influence on drug pricing. With a few firms controlling a significant market share, PBMs' market power could lead to disproportionate profits, underscoring the need for regulatory measures to ensure fair pricing and competition.
As the healthcare community navigates these reforms, the focus remains on ensuring that changes in PBM operations directly benefit patients, especially those in underserved communities disproportionately affected by high drug costs.
340B Program: Addressing Challenges for Future Reforms
The 340B Drug Pricing Program, essential for providing discounted drugs to healthcare providers serving underserved communities, is at a critical juncture. Facing legal challenges and calls for reform, 340B is under scrutiny, particularly regarding its operational complexities and the definition of a 340B-eligible patient. This definition, crucial in determining who accesses discounted drugs, has been a point of contention, with legal interpretations suggesting a need for broader inclusivity, as noted in Bloomberg Law's analysis.
Advocates, including those supporting people living with HIV, recognize the program's significant impact but seek more direct patient benefits, a sentiment echoed in CANN's blog. The current model's effectiveness in providing direct patient benefits, such as reduced drug prices, is being questioned.
Efforts for greater transparency and accountability are intensifying, with state-level initiatives aiming to ensure that program savings directly benefit patients, especially those with financial barriers to medication access, as highlighted in Avalere's insights. State authority to regulate 340B, however, is still in question as Arkansas and Louisiana face lawsuits around recently passed legislation.
Amidst these challenges, 340B's commitment to aiding underserved communities remains paramount. Collaborative efforts among lawmakers, healthcare providers, and patient advocacy groups are crucial to reform the program, ensuring it continues to provide equitable access to care and addresses key issues like medical debt.
Telehealth: A Defining Year in 2024
2024 is set to be a defining year for telehealth, a sector transformed by the COVID-19 pandemic. This year will witness crucial legislative decisions that could shape the future of access to telehealth services.
At the forefront are policy decisions regarding Medicare reimbursement flexibilities for telehealth, as noted in Modern Healthcare's article. Set to expire in 2024, these flexibilities are vital for the continued viability of telehealth, particularly benefiting small practices and those in rural or underserved areas.
Another key development is the anticipated update to remote prescribing rules for controlled substances. The decisions made will crucially balance the need for accessible care with the regulation of controlled substances, impacting how telehealth can be used for medication prescribing.
As 2024 unfolds, the healthcare community faces the challenge of navigating these legislative and policy changes to maximize the benefits of telehealth in patient care and access.
Budget Battles: Critical Healthcare Advocacy Amid Congressional Challenges
The intense budget battles in Congress, underscored by proposed cuts in the House L-HHS Appropriations Bill (H.R. 5894), are central to healthcare advocacy. These cuts, amounting to $767 million, pose a significant threat to essential HIV/AIDS programs, risking the reversal of years of progress in treatment and care. These programs are not just healthcare initiatives; they are vital lifelines providing necessary medications and support to individuals living with HIV.
The Coalition on Human Needs has expressed grave concerns about potential severe cuts to non-defense discretionary appropriations (NDD) for fiscal year 2024, which could drastically impact a range of vital services. In their sign-on letter to Congressional leaders, they warn that these cuts, potentially up to 9% according to the Center on Budget and Policy Priorities, would significantly harm programs essential for public health, education, environmental protection, and more, affecting diverse communities across America. The Coalition advocates for completing the FY24 appropriations process with a bipartisan approach, emphasizing the need to protect these crucial investments that support the nation's most vulnerable populations and uphold the commitment to public health and welfare.
Any major legislative changes will be at the mercy of presidential election year politics, and the congressional balance of power will only make it harder. Issues like PBM reform, or 340B reform, and Telehealth expansion will probably receive a lot of attention via hearings and news clippings, but legislative action remains in doubt.