PBM Executives to Face the Congressional Hot Seat This Week
In late February, seven pharmaceutical company executives went before a congressional panel to answer charges and questions about the high price of many prescription drugs. Now it’s time for executives representing pharmacy benefits managers (PBMs) to face the Capitol Hill crucible.
In the political war over high drug prices, pharma executives have largely pinned the blame for the costs consumers pay on pharmacy benefits managers. During the February meeting before the Senate Finance Committee, executives from Pfizer, AstraZeneca, Merck, Johnson & Johnson, AbbVie, Bristol-Myers Squibb and Sanofi each suggested that if pharmacy benefit management (PBM) rebates were eliminated, they would cut their list prices. At the time of the Senate hearing, Sanofi Chief Executive Officer Olivier Brandicourt said that the current rebate system has failed consumers. Drug manufacturers negotiate rebate deals with the PBMs, which are then supposed to be passed along to consumers. However, Brandicourt told the senators that “… under the current system, savings from rebates are not consistently passed through to patients in the form of lower deductibles, co-payments or coinsurance amounts.”
On Tuesday and Wednesday, the PBM executives will get the chance to defend the accusations made by the pharma companies earlier this year. And it’s likely that the PBM executives will face a frosty and contentious group of federal lawmakers, much like the pharma executives did earlier this year. Much like the pharma executives, the PBM executives are not without some clout. Three of the five companies represented during this meeting are well-known, CVS, CIGNA, and OptumRx, a subsidiary of UnitedHealthcare. All together, these three companies control about two-thirds of the marketspace. Prime Therapeutics and Humana are the other two companies that will be represented on the Hill. STAT NEWS noted that on Wednesday, CVS, Cigna, and OptumRx will be the only companies before the House Energy and Commerce Oversight subcommittee, “which is holding a hearing specifically focused on the roles both pharmaceutical companies and PBMs have played in the rising price of insulin.” Insulin prices have become a key concern for lawmakers as many patients are reporting the high prices of the life-saving medication prevents them from regular treatment.
The PBM executives are likely to be on the defensive, as they have taken the brunt of the pharma companies’ accusations regarding high prices. Also, earlier, the Trump administration outlined a plan to reform the pharmaceutical drug rebate system in order to lower patients’ out-of-pocket costs. Health and Human Services Secretary Alex Azar floated a proposal that would encourage manufacturers to pass discounts directly to patients instead of insurers. Jim Greenwood, president and CEO of BIO, said each year, drugmakers provide “tens of billions of dollars in rebates to help expand affordable access to prescription medicines.” Greenwood said that BIO supports the notion that the rebates offered by companies that develop and market pharmaceutical medicines to insurers and middlemen should be used to lower the out-of-pocket costs of consumers.
PBMs have been trying to get out in front of the pricing issue. Last year, CVS unveiled its CVS Pharmacy Rx Savings Finder. The company said the new tool will provide retail pharmacists the ability to quickly evaluate individual prescription savings opportunities at the pharmacy counter. The tool will also enhance existing savings offered by CVS Caremark, the company’s pharmacy benefits manager, the company said.