In a House Committee on Oversight and Accountability hearing, Democrats and Republicans took a bipartisan stance to question the role major PBMs play regarding rising drug costs in the US.
In a House Oversight hearing on Tuesday, Republican and Democrat committee members came together to question CEOs of the 3 biggest pharmacy benefit managers (PBMs), which control around 80% of the pharmacy benefits market.1 After years’ worth of research and investigation, a major spotlight has recently been placed on the PBMs CVS Caremark, OptumRx, and Express Scripts. However, despite a bipartisan approach and various media reports of their opaque practices, the companies stood their ground during the hearing.
“As is now widely known, every day that passes without reform means more dollars flowing to PBMs instead of reducing Americans’ prescription drug costs and safeguarding access to trusted and convenient pharmacies.Thankfully, recognition of some dominant PBMs’ devastating practices today is prevalent among Republicans and Democrats, conservatives and progressives, federal and state governments, employers, unions, patient groups, providers, rural and urban health advocates, and diverse media outlets.It is past time for action,” stated a multi-association coalition made up of pharmacist associations across the country, according to a National Community Pharmacists Association (NCPA) news release.2
From multiple calls for state and federal reform to ongoing FTC investigations, PBMs have been backed into a corner because of their immense influence on the cost of prescription drugs in the US. Termed in the health care industry as the “pharmaceutical middlemen,” the 3 major PBMs—ran by CVS, Cigna, and UnitedHealth Group—fly under the radar because their business practices are performed behind closed doors with contracts and dealings not subjected to public observation.
“[PBMs] play a major role in the provision of pharmacy services by acting as the intermediary between pharmacies, plan sponsors (insurance companies and employers), pharmaceutical manufacturers, and drug wholesalers. Over the decades, PBMs have expanded their influence in the pharmaceutical supply chain and now handle claims processing, formularies, pharmacy networks, mail-order pharmacies, and contracting with wholesalers and manufacturers. As their role and visibility have increased, PBMs have come under increased scrutiny from policymakers,” wrote authors of a study published in JAMA Health Forum.3
Democrats and Republicans took a bipartisan stance to question the role major PBMs play regarding rising drug costs in the US. | image credit: Elmira / stock.adobe.com
Several lawmakers and industry experts have come together to understand the immense pharmaceutical influence PBMs have garnered over the years. And while this has brought the 3 biggest PBMs to the forefront to answer for their practices, the executives that attended Tuesday’s hearing did not budge.
For example, when Patrick Conway, MD, CEO of UnitedHealth Group’s Optum Rx, was asked why almost every state has taken up PBM reform, he countered and stated that PBMs help patients save money instead of taking it away from them. He also stated that PBMs play a “critical role” in saving patients money, pointing the finger at drug manufacturers’ role in rising drug costs.1
Adam Kautzner, PharmD, President of Cigna’s Express Scripts, also discussed the role manufacturers play, stating that they raised prices on 60% of brand-name drugs in 2023. He continued by saying it was the work of his company’s PBM that helped save patients money despite rising costs.
While the subjects of the hearing were quick to point the finger at other entities within the pharmaceutical supply chain, it was a different story when they were asked specifically about their companies’ practices regarding DIR fees and patient-steering.
“During the hearing, PBM executives refused to answer questions related to retroactive DIR fees that are crushing independent pharmacies, why there are 600 different prices set for a single drug across the country, and how PBMs steer patients to pharmacies they own,” wrote the House Committee on Oversight and Accountability in its hearing wrap-up.4
The executives were also reserved when asked about forcing patients to use mail-order pharmacies under the major PBMs’ networks, as well as their manipulation of drug prices across the country. The executives stated that mail-order pharmacy is simply an option for their patients and did not respond in regard to the role PBMs play in forcing patients to use mail-order services. They also pointed right back at the drug manufacturers when asked about rising costs.4
“We encourage the U.S. House Oversight Committee lawmakers to engage in a balanced discussion that accurately considers the cost-reducing role of PBMs and the value they deliver for health plan sponsors, taxpayers, employers, and patients,” said JC Scott, President and CEO of the Pharmaceutical Care Management Association, in a statement defending PBMs.5 “Too many recent conversations around PBMs reflect a one-sided view informed directly by the pharmaceutical industry’s blame game designed to vilify PBMs to keep prescription drug prices high and increase drug company profits.”
The result of Tuesday’s hearing was not totally unexpected: bipartisan pressure and discussions regarding PBM reform are influencing legislative movement in Congress while the major PBMs continue to stand firm. At this point in the battle between PBMs and their opposition, Congressional action is the only medium for settling the disagreement.
“We urge the Congress’ enactment this year of what should be considered must-pass legislation: PBM reforms which theCongress has developed and which Americans and their pharmacies desperately await,” concluded the multi-association coalition’s statement.2
READ MORE: NCPA Representative Discusses Role in Influencing PBM Reform
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