Insights

When Congress returns after the November election, it will have a slew of spending bills to address—either passing them or kicking the can down the road until the new year. One of the topics that could resurface in the lame duck is reforms to requirements on Pharmacy Benefit Managers (PBMs), as there has been bipartisan support this year for measures to change the way PBMs do business. 

What is a PBM? 

PBMs are third-party administrators that manage prescription drug plans for health insurers, Medicare, Medicaid, and large employers.1 They negotiate discounts and rebates with drug manufacturers, create formularies (lists of covered drugs), and manage pharmacy networks.   PBMs were designed to create cost savings, manage formularies, streamline the process of getting medications to patients and providers, and to help with patient medication adherence. 

Current Issues 

Many of these benefits have been achieved – but in recent years, many in Congress have identified concerning PBM behaviors and now feel the system and market have become misaligned.  The House and the Senate have spoken of the lack of transparency within PBMs.  Leaders in both chambers have also pointed out that current reimbursement incentives steer PBMs toward higher cost drugs, as they receive higher reimbursements for these drugs2.  In fact, studies have shown that PBMs are costing patients more in out-of-pocket prescription drug spending.3 Advocates have also said that PBMs are one of the largest factors in the closure of local ” mom-and-pop” pharmacies.

PBM Reform 

Consequently, both the House and Senate have considered PBM reform bills in this Congress.  The full House passed legislation with broad bipartisan support late last year, while the Senate has moved legislation at the committee level. Legislation focused on changing compensation for drug pricing and service fees5, creating more transparency regarding PBM pricing and reimbursement practices, allowing beneficiaries to have flexibility in which pharmacy they want to use, and changing the way drug savings and discounts are accounted for and distributed6.  These bills would create significant cost savings for the Medicare program – upwards of $1 billion – so PBM reform will be eyed as a “pay for” if Congress wants to offset the costs of other legislation.  

When Congress returns after the elections, whether some type of PBM reform will be passed this year remains an open question. Should Congress not move PBM reform this year, we expect that in 2025 PBMs will continue to be in the bipartisan crosshairs of policy leaders on both sides of the Capitol until some form action is taken. 

With less than a month until the 2024 U.S. presidential election, the stakes are high for the future of American health care. Democratic nominee, Vice President Kamala Harris, and former President Donald Trump returning as the Republican nominee, represent two vastly different visions. Their health care agendas diverge widely regarding philosophy, focus, and implementation. Here’s an overview of the potential health care priorities under a Harris administration versus what a second Trump administration might reintroduce or pursue. 

Kamala Harris: Expanding Access and Building on the ACA 

As Vice President under Joe Biden, candidate Kamala Harris has already shaped and advocated for health care policies aimed at expanding access, affordability, and coverage. If elected, she would likely continue to push forward these priorities, aiming to expand the Affordable Care Act (ACA) while addressing broader health care inequities.  Some key points from her campaign include: 

1. Protecting and Expanding the ACA
   Harris has reiterated her support for expanding the ACA, which she views as crucial for maintaining health coverage gains made since its passage. Her campaign has emphasized making health care more affordable, particularly by reducing premiums and expanding subsidies under the ACA. 
2. Lowering Prescription Drug Prices
   Similar to the Biden administration, Harris has highlighted lowering prescription drug prices as a key focus in her campaign. While she hasn’t laid out all specifics, it’s reasonable to assume she would continue advocating for measures like allowing Medicare to negotiate drug prices—something Democrats have been pushing for in Congress. 
3. Public Option Support
   Although Harris has not focused heavily on the Medicare for All Act in the 2024 campaign, she supports offering a public option. This government-run insurance plan would compete with private insurers. This is consistent with her shift during the 2020 Democratic primary when she moved away from fully endorsing Medicare for All to a more moderate position that expanded choice without eliminating private insurance. 
4. Reproductive Rights & Health Equity
   Harris is vocal about defending reproductive rights, including access to abortion and broader reproductive health services. Given the recent rollback of abortion protections following the Supreme Court’s decision to overturn Roe v. Wade, Harris promises to take a strong stance on restoring and expanding access to reproductive health care. Expect targeted investments in addressing health care challenges for marginalized communities, including people of color, LGBTQ+ individuals, and rural populations, as well, given her storied championship of the disproportionate challenges they face. 

Donald Trump: Return to Priorities from First Term 

Former President Donald Trump’s 2024 campaign has largely emphasized the need to reverse many Biden-era policies, but his health care agenda is likely to build on the deregulatory approach of his first term. Although Trump has not released a detailed health care platform, based on past actions and statements, we can anticipate the following key points: 

1. Repealing the ACA
   Trump vows to “repeal and replace” the ACA during his presidential debate with Harris on Sept. 10.  He offers no details on what the replacement would entail, and his campaign continues to explicitly outline any specific replacement plans.  Trump’s administration attempted multiple times to dismantle the ACA, and he may return that effort if re-elected.  He signals that he views the ACA as an overreach of government and has previously called for a replacement focused on privatization and less regulation. 
2. Medicaid Work Requirements
   During his previous term, Trump supported adding work requirements for Medicaid recipients, a policy consistent with his vision of reducing government dependency. Though his campaign has not spotlighted this yet, work requirements would likely return as part of a broader effort to scale back Medicaid and other entitlement programs if he is re-elected. 
3. Medicare and Medicaid Reform
   Trump has expressed his opposition to any cuts to Medicare in his 2024 bid for the White House.  Given his previous Administration’s support for Medicare Advantage (MA)It seems likely that a second Trump Administration would not pursue policies to reduce payments to MA plans. That said, bipartisan interest in reforming prior authorization requirements under MA plans may be something Trump could support. Similarly, he could revisit the block grant approach to Medicaid, which would give states more flexibility to set their own rules, often resulting in cuts or stricter eligibility requirements.  This is aligned with what has traditionally been a staple of Republican health policy: the idea that solutions should be market-based and should shrink the federal government’s involvement in health care. 
4. Prescription Drug Pricing and Transparency
   Trump campaigns on the issue of lowering prescription drug prices, something that cuts across party lines. In his 2024 campaign, he reiterated the importance of forcing pharmaceutical companies to lower prices. He previously introduced the “most favored nation” rule, tying U.S. drug prices to lower prices in other countries. While it is not certain if this specific policy will return, Trump’s emphasis on price transparency and competitive markets is likely to shape his drug price reform efforts. 

Campaign Rhetoric and Broader Trends 

Neither Harris nor Trump have released fully detailed health care platforms for their 2024 campaigns at this point. However, the rhetoric from each campaign aligns closely with their historical stances: 

• Harris’s health care agenda preserves and expands access, particularly for underserved and vulnerable populations. She positions herself as a defender of the ACA, a champion for reproductive rights, and an advocate for reforms like a public option that expands coverage while controlling costs. 

• Trump’s health care approach focuses on deregulation, reducing government involvement in health care, and pushing market-driven solutions. He has continued to emphasize reducing drug costs and may revive efforts to roll back the ACA and add Medicaid work requirements. 

Both campaigns are still developing, and as the election nears, specific policy details on health care may emerge. However, the philosophical differences between Harris and Trump are clear: one prioritizes expanding government programs to ensure broader access, while the other seeks to limit the government’s role in health care and encourage private market solutions.