House Committee Grills Big 3 PBM Executives On Practices
Executives from the Big 3 pharmacy benefits managers (PBMs) got grilled today before the House Oversight Committee. The committee just released a report on its over year-long investigation of the Big 3 that found that they are anticompetitive, imperil independent pharmacies, overcharge payers and patients using spread pricing, and enter into brand drug rebate deals that tie to the drugs’ preferential placement on formularies. The report concluded the Big 3 not only don’t save on or control costs but steer patients toward higher-priced drugs and their own pharmacies.
The committee argued that the PBMs have created multiple ways to advantage themselves in the vertically integrated world the Big 3 live, including the use of group purchasing organization (GPOs). The executives tried to refute the findings and often were silent in response to questioning. The committee also criticized prior authorization and step therapy use.
In other news, CVS Health agreed to pay at least $45 million to the state of Illinois to settle allegations that rebates were not passed through during a recent four-year period.
I have been a defender of PBMs over the years because they do bring value. But more and more, evidence is coming out regarding some unseemly activities, including rebate deals, spread pricing, and related-party transactions that do disadvantage government programs, companies, and the public at large. These practices need to change.
But I am amazed at how little focus is on the biggest problem in drug pricing – brand drug makers. Yes, we have Medicare drug price negotiations, but only Democrats have challenged the brand drug makers on high prices and bad practices. The attack on PBMs is bipartisan, but the GOP has refused to challenge brand drug makers.
Additional articles: https://www.fiercehealthcare.com/payers/pbms-defend-its-business-practices-lawmakers-arent-convinced and https://www.modernhealthcare.com/politics-policy/pbm-hearing-cvs-caremark-express-scripts-optum-rx and https://www.modernhealthcare.com/politics-policy/pbm-congressional-hearing-house-oversight-committee-cvs-cigna-unitehealth and https://www.wsj.com/health/pharma/drug-middlemen-push-patients-to-pricier-medicines-house-probe-finds-80c20fda and https://www.statnews.com/pharmalot/2024/07/23/cvs-caremark-pbm-illinois-medicines-rebates-ftc/
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#drugpricing #pbms #branddrugmakers
https://thehill.com/policy/healthcare/4788713-pbms-prescription-drug-costs-medication