The chair of the House Committee on Oversight and Accountability wants the CEOs of CVS Caremark, Express Scripts and Optum Rx to fix statements they made in a hearing last month that contradicted the committee’s and Federal Trade Commission’s findings.
Rep. James Comer (R-Ky.), chair of the House Committee on Oversight and Accountability, on Wednesday asked the CEOs of the top three pharmacy benefit managers to correct alleged inconsistencies in their testimonies at a hearing last month.
Comer claims that the executives’ statements contradicted the committee and the Federal Trade Commission’s findings about the “self-benefiting practices” that pharmacy benefit managers (PBM) employ to “jeopardize patient care, undermine local pharmacies, and raise prescription drug prices.”
In his letter to CVS Caremark President David Joyner, Comer flagged two instances in which the executive testified that CVS-affiliated pharmacies were paid less than others in its network. This statement “contradicts” findings from an interim FTC staff report, showing PBMs reimburse affiliated pharmacies “significantly higher rates” than other pharmacies, according to Comer.
In some instances, affiliated pharmacies even enjoy reimbursements that “exceed the National Average Drug Acquisition Cost,” which approximates the invoice price that pharmacies pay for drugs in the U.S., Comer’s letter states.
The committee chair also wrote to Express Scripts President Adam Kautzner, highlighting two areas of his testimony where the executive claimed that Express Scripts does not steer patients away from independent pharmacies and toward affiliated pharmacies.
These statements run contrary to the committee’s and FTC’s findings, Comer noted, citing evidence that Express Scripts conducts targeted outreach to patients—using data it obtained from competing pharmacies—to encourage them to transfer prescriptions to pharmacies affiliated with the PBM. Comer also found inconsistencies in Kautzner’s claims that Express Scripts allows non-affiliated pharmacies to negotiate the terms of their contracts.
Comer flagged similar contradictions in the statements made by Optum Rx CEO Patrick Conway, who claimed in his testimony that the PBM does not steer patients toward affiliated pharmacies and said that Optum Rx does not reimburse affiliated pharmacies more than other pharmacies in its network.
In all three letters, Comer warned the PBM executives about the consequences of committing perjury in their respective testimonies, for which they could be fined and serve prison time of up to five years.
The letters come on the heels of the House Oversight Committee’s hearing last month, where the three PBM heads insisted that their companies play a vital role in the pharma industry by promoting competition and helping to lower drug prices. They blamed pharma companies for the rising medicine costs, which they contend employ and exploit elaborate patent thickets to discourage generic competition.
Weeks before the hearing, the FTC issued a scathing report on PBMs, finding that these middlemen have become thoroughly vertically integrated with suppliers and retailers, allowing them to dominate the pharma market. PBMs are abusing their substantial influence on the industry, according to the FTC, often imposing unfair or harmful contract terms on independent pharmacies and potential lower cost drug competitors.
FTC Chair Lina Khan said that PBMs “squeeze independent pharmacies that many Americans—especially those in rural communities—depend on for essential care.”
