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  • Writer's picturePUTT

Bipartisan support on key panel for crackdown on pharmaceutical middlemen

Members of both parties on the House Committee on Oversight and Accountability expressed support for the regulation of pharmacy benefit managers, or PBMs, Tuesday during the first of a series of hearings investigating the role of middleman organizations in the rising cost of prescription drugs.

Chairman James Comer (R-KY) said in his opening statement that “many PBMs are acting without consequence to the detriment of patients and their pocketbooks because PBMs have been allowed to hide in the shadows. It’s time to bring them into the light.”

PBMs are third-party administrators that negotiate drug prices between consumers and insurance companies, but critics deem them monopolistic due to their vertical integration within the pharmaceutical industry.

Ranking member Jamie Raskin (D-MD) said PBMs are notorious for playing “outrageous hide and go seek games” that prevent physicians from providing quality care for their patients at reasonable prices and expressed interest in taking “an important bipartisan” step to regulate PBMs.

It is not yet clear how the committee might proceed with legislation.

The Pharmaceutical Care Management Association, which represents PBMs, issued a statement criticizing the committee for its choice of witnesses and the structure of the investigation.

"To hold an Oversight hearing focused on one industry, without inviting a witness who can speak to the depth and diversity of that industry or offer a balanced perspective and answer key questions, should raise concerns about a powerful panel pursuing predetermined conclusions to pick winners and losers in the marketplace," said the group's CEO, J.C. Scott.

Dr. Miriam Atkins, president of the Community Oncology Alliance, said in testimony that she and her patients must navigate a “PBM hell,” such as insurance companies denying drugs prescribed by a physician for a patient because it is not made by the affiliated pharmaceutical company.

Rep. Virginia Foxx (R-NC) asked Atkins several questions relating to the so-called “fail first” policies of insurance companies, which require physicians to prescribe medications or procedures according to insurance protocols even if the doctors know they'll be ineffective or inconclusive. Atkins said it is a particularly dangerous practice for life-threatening diseases such as cancer.

Members of both parties said they were worried about oligopolistic tendencies in the pharmaceutical industry at large and PBMs in particular. Rep. Raja Krishnamoorthi (D-IL) said in his questioning that PBMs “stand for Pretty Big Markups.”

Kevin Duane, an independent pharmacist from Jacksonville, Florida, noted in his testimony that although he is a strong supporter of capitalism and believes in little government economic intervention, “free and fair markets don’t exist” in medicine.

Scott advised that "without hearing from the wider industry in question, and without taking a broader look at the entire supply chain, the Oversight Committee risks fundamentally misconstruing the role of pharmacy benefit companies" and asked that the committee "reconsider its approach to this investigation to ensure its findings, and any related policy recommendations, accurately and fairly consider the facts, and the negative implications for patients and employers of any government intervention in the market that undermines the cost-saving value of pharmacy benefit companies."

PBMs also face threats beyond legislation. The Federal Trade Commission has been investigating PBMs for anti-competitive business practices and expanded its inquiries last week to include Zinc Health Services and Ascent Health Services. Zinc and Ascent define themselves as group purchasing organizations, or GPOs.

According to the FTC, "The largest PBMs are integrated with the largest health insurance companies and wholly-owned, mail-order, and specialty pharmacies. They influence which drugs are prescribed to patients, which pharmacies patients can use, and how much patients ultimately pay at the pharmacy counter."

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1 Comment

One other thing that is not stated. Many times patients pay a 100% copay, meaning the PBM pays nothing to the pharmacy. A patient should pay a percent of the total and that total should cover the cost of the drug and the average cost for the pharmacy to dispense a drug. Medicare Part D, Medicaid, and any other govt program should be reimbursed this way.

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