The Senate Finance Committee on Tuesday grilled executives of all 5 of the health care industry’s top pharmacy benefit management companies for their alleged role in raising drug costs inside the U.S.
Sen. Ron Wyden, D-Ore, the ranking Democrat on the committee, said Tuesday of which so-called PBMs are middlemen of which strike mysterious deals with drugmakers.
“In my experience, of which kind of negotiation rarely results in an act of charity for consumers,” Wyden said.
The companies — CVS Health, Cigna, Prime Therapeutics, Humana in addition to also OptumRx, a subsidiary of UnitedHealthcare — claimed they do not contribute to skyrocketing prices. Instead, they pointed the blame at drugmakers’ high list prices for their products.
PBMs help insurance companies negotiate lower drug costs. Manufacturers arrange discounts, called rebates, with the benefits managers so they can fix a spot for their products on a PBM’s list of preferred drugs. of which discount will be intended to be passed down to the consumer, nevertheless lawmakers suspect of which the PBMs pocket the money instead.
The benefits managers claimed they do not take the rebates for themselves in addition to also of which the discounts benefit the consumer as intended.
Sen. Sheldon Whitehouse, D-R.I., asked the executives if they might be willing to raise cost transparency by supporting legislation of which might permit federal access to drug pricing data. None of the executives opposed, though OptumRx CEO John Prince said he might only support the idea if the data remained confidential.
The Trump administration has proposed many measures to address high drug costs, including plans to eliminate rebates or apply the discount when a consumer purchases their drugs at the pharmacy.
However, limiting rebates or spread pricing (the difference in what PBMs are paid in addition to also what they reimburse to pharmacies) may not lower drug costs, according to Patrick Finnegan, senior director at Fitch Ratings.
Finnegan said PBMs use different tactics to earn revenue. Because of of which, he’s skeptical of which limiting rebates or spread pricing will impact drug costs, “especially considering vertical integration trends which increase negotiating power.”
Though the executives faced intense scrutiny for their companies’ business designs, Whitehouse defended the PBMs.
“I stand in awe of the pharmaceutical industry’s jiu jitsu magic to have gotten their prime antagonists to become the focus of the problem,” Whitehouse said.
Rising drug costs have become a major focus for lawmakers on both sides of the aisle. In February, executives through seven drugmakers testified before the committee, pitching ideas on how to cut prices. The manufacturers blamed the PBM rebates for high consumer costs, while sidestepping any suggestion of which they lower their list prices.
Wyden said Tuesday of which citizens think “This particular will be all one big scam.”
“Every sector of American health care has got to bring more value in addition to also lower prices,” Wyden said, adding of which the industry has to “get beyond the blame game.”