We may finally have an answer (for now) to the question of who is really responsible for the increases in drug costs and the corresponding increase in negative patient outcomes. A new bill was introduced following the House Oversight and Accountability Committee hearing, where, when presented with tough questioning, PBMs failed to prove their claims. This latest bill joins dozens of other bipartisan efforts on both the federal and state level to reform the role Pharmacy Benefit Managers (PBMs) play in the U.S. drug distribution system.
We already know that PBMs negotiate rebates with drug makers on behalf of insurers, large employers, and federal health plans. However, these middlemen have been able to fence in $300 billion in revenue1 by overcharging plans, under paying pharmacies, and failing to pass on savings discounts to patients. For argument’s sake, executives from the three largest PBMs UnitedHealth Group’s OptumRx, CVS Health’s Caremark, and Cigna’s Express Scripts have testified against the allegations that they play a role in rising healthcare costs. They argued that their tactics shield patients from high healthcare costs,2 and attempted to redirect the blame to the drugmakers that are setting high list prices for drugs, but thanks to years of in-depth investigation, they were unsuccessful.
The Oversight Committee obtained over 140,000 documents and communications from OptumRx, Caremark, and Express Scripts showing how PBMs inflate prescription drug costs and interfere with patient care for their own financial benefit. The investigation revealed that PBMs play an oversized role in the pharmaceutical supply chain and push deliberate pricing tactics to line their own pockets3.
Chairman James Comer (R-KY) discussed how PBMs blame drug manufacturers for higher cost medications, despite reports demonstrating PBMs charge different prices across the country. Comer stated, “Since 2021, the Committee has made it a priority to expose harmful PBM practices and advance legislative solutions to ensure greater transparency and accountability in the PBM industry. Instead of prioritizing the health of Americans across the country, evidence obtained by the House Oversight Committee shows how the three largest pharmacy benefit managers colluded to line their own pockets.”
~ Hearing Wrap Up: Oversight Committee Exposes How PBMs Undermine Patient Health and Increase Drug Costs
Executives from CVS Caremark, Express Scripts, and OptumRx refused to provide clear answers to lawmakers. Throughout the hearing, PBM executives refused to answer questions related to:
• Retroactive DIR fees that are stifling independent pharmacies
• Why there are 600 different prices set for a single drug
• How they steer patients to pharmacies they own
Representatives from various states and political parties spoke on behalf of PBMs. They covered numerous topic that aligned with the PBMs talking points but were outmatched by the facts:
1. Despite reports revealing PBMs charge different prices across the country, PBMs blame drug manufacturers for the high cost of prescription drugs.
2. Instead of PBMs working to reduce the cost of prescription drugs for Americans, the cost of prescription drugs has gone up every year for fifteen years.
3. PBMs fail to pass on rebates to patients, and demonstratively prioritize drug costs over a doctor’s recommendation.
4. PBMs limit options for filling prescriptions and steer patients to preferred pharmacies.
5. The committee pressed the executives to provide data on how they benefit the pharmaceutical marketplace and patient care. (hint: they couldn’t)
6. “Rep. Buddy Carter (R-GA) detailed his personal experience with PBMs as a pharmacist and highlighted that he has seen patients being rejected critical medication. He emphasized that the three major PBMs limit options for patients and pharmacists seeking to help4.”
After more than a decade of hands-on experience in patient affordability, we became outspoken about the urgent need for pricing transparency within the healthcare industry. Matt Turner, President of Patient Affordability here at Paysign states, “On top of copay accumulators and maximizers, insurer-affiliated PBMs, which now account for 80% or more of all prescription drug claims, have been able to get away with diverting nauseating amounts of money away from patient care and into their own pockets5.”
Paysign remains a staunch advocate for reforms within the pharmaceutical supply chain, and the wider healthcare industry, and we are very encouraged to see these committees and agencies investigate further into the questionable practices of these middlemen driving price inflation and overall, reducing the quality of patient care. We value our role in assisting pharmaceutical companies increase patient access and adherence to lifesaving medications and therapies through patient assistance programs.
Read the full releases and articles:
• Oversight and Accountability, House Committee. Pharmacy Benefit Managers Must be Held Accountable for Role in Rising Drug Prices, https://oversight.house.gov/release/comer-pharmacy-benefit-managers-must-be-held-accountable-for-role-in-rising-drug-prices%EF%BF%BC/
• Constantino, Annika Kim. “Lawmakers Introduce Bipartisan Bill Aiming to Crack down on Drug Middlemen as Scrutiny Ramps Up.” CNBC, CNBC, 23 July 2024, www.cnbc.com/2024/07/23/lawmakers-unveil-pbm-reform-bill-amid-rising-drug-costs.html.
• Turner, Matt. “An Industry Poised for Progress: Bringing Innovation Back to Copay.” PM360, 22 Apr. 2024, https://www.pm360online.com/bringing-innovation-back-to-copay/ . Accessed 13 Aug. 2024.
• “Takeaways from the Government Investigations on PBMs.” Paysign.Com, 29 July 2024, https://paysign.com/five-takeaways-from-government-investigations-on-pbms/ . Accessed 13 Aug. 2024.