H.R. 8779: Patients Before Monopolies Act

This bill, known as the Patients Before Monopolies Act, aims to prohibit pharmacy benefit managers (PBMs) and pharmacies from being owned or operated by the same corporate entity. The legislation seeks to address concerns regarding conflicts of interest that arise when these entities are intertwined, which may lead to reduced competition and increased drug prices for consumers.

Key Provisions

• Ownership Restrictions: The bill makes it illegal for any person or entity that operates a PBM or health insurance company to also own or operate a pharmacy. This requirement is intended to promoting fair competition in the prescription drug marketplace.
• Divestment Timeline: Entities currently in violation of this ownership restriction will be required to divest their pharmacy holdings within one year of the bill's enactment.
• Enforcement Powers: The Federal Trade Commission (FTC) and the Department of Justice (DOJ) will have the authority to enforce these provisions, issue penalties for non-compliance, and oversee divestitures. Guidelines for the divestiture process will be established within 30 days of the bill's passage.
• Civil Actions: State attorneys general, the FTC, and the DOJ can initiate civil actions against entities that violate these regulations. Individuals harmed by these practices may also seek legal recourse and can obtain treble damages, cost reimbursement, and other remedies in court.

Background and Purpose

The bill highlights that the market for PBMs is highly concentrated, with a small number of large entities controlling a significant portion of prescription drug distribution and pricing. The bill addresses findings that these vertically integrated companies may prioritize their own affiliated pharmacies, which can limit consumer options and inflate drug prices. Additionally, there are concerns about the impact of PBMs on independent pharmacies, with many having closed due to commercial pressures.

Regulatory Framework

• FTC and DOJ Roles: These agencies will gain additional regulatory powers to review and block transactions that could create further conflicts of interest.
• Transparency and Reporting: Regular reporting requirements will be established to track compliance with the bill and the status of divestitures.
• Consumer Protections: Any revenues received from sales during violations may be subject to disgorgement, which means they would be returned or used to support impacted communities.

Potential Impact

The overall goal of the Patients Before Monopolies Act is to restore competition in the pharmacy and healthcare marketplaces, particularly aiming to protect consumers, independent pharmacies, and taxpayers from monopolistic practices that could lead to higher drug costs and fewer choices in pharmacy services.

Relevant Companies

• ANTM (Anthem, Inc.) - This health insurance provider may need to divest any pharmacy operations if they own pharmacies in conjunction with their PBM services.
• CVS (CVS Health Corporation) - As an integrated healthcare company that includes a retail pharmacy and PBM, CVS could be directly affected by the requirement to separate these operations.
• CNC (Centene Corporation) - Centene, which also operates within the health insurance realm, may have to reevaluate its ownership structures, particularly if it holds affiliations with pharmacies.