Americans pay more for prescription drugs than patients in any other wealthy country, and it’s not just due to exorbitant pricing by drug manufacturers. Three corporate middlemen — CVS Caremark, Express Scripts, and OptumRx, collectively known as pharmacy benefit managers (PBMs) — control key channels in the drug supply chain, including roughly 80% of prescription claims in the United States. Their business model artificially inflates and benefits from high drug prices. Why reform has failed. PBM reform has become a hot topic over the past decade but policy solutions have been woefully inadequate. Regulators have targeted well-known PBM tactics but PBMs have simply pivoted to new sources of extraction. States have passed laws just to get pre-empted in court. The big three PBMs continue to evolve faster than lawmakers legislate and enforcers litigate. Government regula…

The federal government already has the infrastructure to replicate this: the VA has been negotiating drug prices directly for decades and secures some of the lowest rates in the U.S. The federal government could take immediate action to stand up a VA-based federal PBM for federal employees and military beneficiaries — roughly 18 million lives — under existing authority, without new legislation. More substantively, Congress could legislate a national public option for PBM services covering Medicare, Medicaid, and commercial plans. The United States is a global leader in pharmaceutical innovation, responsible for many of the world’s most important medical breakthroughs. Yet for millions of Americans, these advances remain out of reach due to the high cost of prescription drugs. One in five insured Americans and seniors, including Medicare beneficiaries, report going wit…