Drug Intermediaries Face Bipartisan Criticism as Congress Considers Industry Reforms

Executives from three of the largest pharmacy benefit managers (PBMs) pushed back against bipartisan criticism during a House Oversight Committee hearing on Tuesday, where lawmakers blamed the industry for high drug prices.

Executives have blamed pharmaceutical companies for these prices, saying that PBMs save patients money and that customers actively choose to partner with them because of these savings.

Without PBMs to negotiate with, they argued, pharmacy costs to patients would be substantially higher.

“We are the connected fiber fighting to ensure access to safe, effective and affordable medicines,” Adam Kautzner, president of Express Scripts.

He said Express Scripts saved its customers $64 billion last year and kept patients’ out-of-pocket costs per prescription at $15, “despite brand manufacturers raising drug prices on 60% of these products.”

CVS Caremark President David Joyner said that brand-name products “with little or no competition continue to be the main source of rising drug costs, driven by their high list prices.”

The hearing showed that lawmakers were interested in a number of areas for possible reforms, including PBMs that steer patients to higher-priced medications and to preferred pharmacies that they also own.

“We hear you’re the problem,” said Chairman James Comer (R-Ky.). “There is a credibility problem with PBMs.”

PBMs negotiate the terms and conditions of access to prescription medications for hundreds of millions of Americans. They are responsible for negotiating prices with pharmaceutical companies, paying pharmacies, and determining which medications patients can access and how much they cost.

Much of the hearing focused on a report released by the Oversight Committee’s majority staff, which showed how the three largest PBMs — CVS Caremark, Express Scripts and OptumRx — created formularies that encourage the use of higher-cost medications, even when there is lower prices. cost and equally safe and effective competing options.

The report states that PBMs often favor brand-name drugs because higher prices lead to likely larger discounts that may benefit the PBM but cost patients, PBM customers and taxpayers more money.

These three companies control about 80% of prescriptions in the US and are all vertically integrated with health insurers, pharmacies and service providers.

The report, which was the culmination of a 32-month investigation, concluded that PBMs also force patients to pay more to use a local pharmacy rather than the PBM-owned mail order pharmacy and reduce reimbursement rates. to competing pharmacies.

“Simply put, the Committee’s investigation concluded that – although PBMs’ position as intermediaries should have allowed them to reduce prescription drug costs and improve health outcomes for Americans – it did not,” Comer said during the hearing on Tuesday .

The Federal Trade Commission, which has also been investigating PBM business practices, released an interim report earlier this month with similar findings that blamed PBM anticompetitive business practices for rising prescription drug costs.

The hearing also focused on independent pharmacists, who say PBMs are putting them out of business.

Rep. Raja Krishnamoorthi (D-Ill.) cited federal figures showing that the price of concession fees that pharmacies pay to PBMs increased by 107,400 percent between 2010 and 2020.

It’s “a rate of increase that literally boggles the imagination,” Krishnamoorthi said.

All executives said they do not refer patients to preferred pharmacies, although lawmakers on both sides of the aisle responded with skepticism.

When Comer pressed executives to commit not to refer patients to their own pharmacies, he indicated that they were dodging the issue.

“I’ll take that as an answer [that] you’re going to continue to drive patients away from independent pharmacies,” he said.

Congressional pressure on PBMs has been increasing, and Tuesday’s hearing could serve to boost efforts to include PBM reforms in a legislative package during the legislative session following the November elections.

Legislation targeting PBM practices passed the House and a Senate committee last year but was not included as part of a spending agreement in March.

This story originally appeared on thehill.com read the full story