U.S. Sen. Josh Hawley has been a consistent champion for meaningful health care reform — particularly efforts to rein in the unchecked influence of supply-chain middlemen — and has led on pharmacy benefits manager (PBM) reform initiatives for years. His latest effort to break up health care conglomerates is another important step toward achieving affordability in our health care system. The consolidation in our health care system is hurting pharmacies, providers and ultimately reducing access for patients through higher costs.
However, his recent quote that “Big Pharma” and insurance companies are gobbling up independent pharmacies is slightly off target. It’s massive insurance companies such as UnitedHealth Group, Aetna and Cigna and their PBMs or self-owned pharmacy operations that are hurting independent pharmacies and buying up clinics.
While I entirely support Sen. Hawley’s efforts and encourage breaking up big healthcare monopolies, let’s keep all our arrows at the correct target when we talk about who those monopolies are. There is a big difference between Big Pharma and Big Insurance, and certainly Big Pharma is no angel. Insurance companies have grown unchecked into conglomerates — becoming increasingly vertically integrated in our health care system, owning everything from insurance to pharmacies to clinics to the third-party administrators and middlemen that manage the payments to all the other players. In recent years, they have even gone so far as to create shell companies overseas, group purchasing organizations, that help their PBMs skirt U.S. regulations and retain profits that are meant to help drive the price down for patients.
Health insurance subsidiaries don’t just own PBMs and specialty pharmacies, they also own clinics, think CVS Health MinuteClinics. UnitedHealth Group, which owns UnitedHealthcare and OptumRx, has recently been scrutinized for pressuring physicians at the clinics it owns to up-code Medicare Advantage patients for bigger payouts. These are just a few examples, but there are reams of evidence that massive health insurance companies have used their size to manipulate healthcare costs, driving up prices for patients.