President-elect Donald Trump sets his sights on transforming the pharmaceutical industry's pricing structure in a major policy announcement at Mar-a-Lago.
According to Breitbart News, Trump declared his intention to eliminate Pharmacy Benefit Managers (PBMs), describing them as unnecessary middlemen who inflate drug costs while providing minimal value to the healthcare system.
The announcement comes as part of Trump's broader healthcare strategy, which includes the appointment of Robert F. Kennedy Jr. as Health and Human Services nominee and Dr. Mehmet Oz as the Center for Medicare and Medicaid Services nominee.
Both appointees have extensively discussed PBM reform as a crucial component of their healthcare agenda, making it a central focus of their policy discussions.
The current pharmaceutical pricing landscape is dominated by three major PBM companies: CVS Caremark, Express Scripts, and OptumRx.
These entities control approximately 80 percent of the PBM market and manage drug benefits for more than 270 million Americans. Their extensive control over drug formularies and pricing structures has raised significant concerns about market manipulation and unnecessarily inflated costs.
Trump voiced his criticism of the current system, emphasizing the need for immediate reform. Here's what he said during the press conference:
The horrible middleman that makes more money, frankly, than the drug companies, and they don't do anything except they're a middleman—we're going to knock out the middleman.
The impact of PBMs on healthcare costs has been highlighted by industry professionals. Jacksonville pharmacist Kevin Duane provided testimony to the House Committee on Oversight and Accountability, stating:
Patients and their doctors have virtually no say in what drugs are used, since the PBM essentially forces which drugs can be used – not because a drug is better or worse, but because the PBM can make more money from it.
Trump's previous attempts at PBM reform included a 2020 policy that would have allowed seniors to benefit directly from manufacturer rebates. This initiative aimed to reduce medication costs for elderly Americans by redirecting rebates from PBMs to patients. However, the policy was later reversed under the Biden administration's Inflation Reduction Act.
Current legislative efforts to address PBM reform include The Modernizing and Ensuring PBM Accountability Act and the Mental Health, Lower-Cost Drug and Extenders Package. These bills have gained support from over 20 conservative groups and propose delinking PBM fees from medicine prices to eliminate profit-driven incentives that increase drug costs.
The proposed reforms would fundamentally restructure how PBMs operate within the healthcare system. By breaking the connection between drug prices and PBM fees, the legislation aims to create a more transparent and cost-effective medication pricing structure for seniors.
President-elect Trump's campaign against PBM middlemen represents a significant shift in pharmaceutical pricing policy. His plan to eliminate PBMs and restructure drug pricing mechanisms aims to deliver substantial cost savings to American seniors and reform the current pharmaceutical distribution system.
The implementation of these reforms would impact the healthcare coverage of over 270 million Americans currently under the PBM administration. With the support of his nominated healthcare team and proposed legislative measures, Trump's initiative seeks to address one of the most pressing issues in American healthcare: the rising cost of prescription medications.
