PUTT ON CONGRESSIONAL HEARINGS: FULL PBM OVERSIGHT, TRANSPARENCY REQUIRED IF WE ARE TO FIX OUR BROKEN PRESCRIPTION DRUG SYSTEM
On Tuesday April 9 and Wednesday April 10 the Senate Finance Committee and House Energy and Commerce Committee respectively convened hearings to question pharmacy benefit managers (PBMs) about their role in the high cost of prescription drugs. Unfortunately, questions asked by the Senate barely skimmed the surface of the problem, and PBM answers were predictably limited to a handful of tired talking points about “saving clients money” and “passing 100% of rebates through to their clients”.
While neither hearing resulted in transparency or even a clear definition of “client”, we applaud Rep. Buddy Carter for calling attention to the relationship between PBM-negotiated rebates and insurance companies - notably the ones that own PBMs and those that are PBM-owned. That is to say, PBMs with financial ties to insurance companies are very often negotiating and keeping rebates for their parent company, which another version of keeping the rebate to the benefit of their own bottom line.
Congress can hardly be blamed for a system so complicated and opaque that not even the antitrust division of the Department of Justice understands it enough to block the merger between CVS Health and Aetna for obvious conflict-of-interest reasons.
America’s prescription drug system is irretrievably broken and the “fixes” that have been proposed and implemented so far have only made the situation worse. These fixes include turning state- and federally- funded Medicaid and Medicare programs over to private contractors in the name of saving beneficiaries (patients) money. But thanks to recent state investigations, we now know PBMs can game the system to drive small pharmacies out of business while bilking taxpayers out of hundreds of millions of dollars.
Only full regulatory oversight of PBMs and complete transparency among members of the prescription drug supply chain will enable us to fix our broken system. In the pharmacy sphere this includes but is not limited to:
PBMs are fighting VERY hard to protect their privacy, falling on claims of “proprietary information” and “trade secrets” when asked the most basic questions about their pricing practices, and making ominous but nonsensical threats about “drug prices going up” if transparency is mandated.
America’s high drug price crisis can be fixed, and Americans should be the ones to fix it. We call on our country’s legislators, healthcare providers and healthcare business leaders to work together to resolve the problem together to make American prescription drugs affordable again.