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During a recent hearing held by a U.S. Senate committee, a variety of witnesses took the
stand who nearly all had one message in common: criticizing the role PBMs
play in increasing medication costs for consumers. The hearing — which is
just the latest indication lawmakers are more closely monitoring PBMs —
occurred less than three weeks after Sens. Chuck Grassley (R-Iowa) and Maria
Cantwell (D-Wash.) introduced the Pharmacy Benefit Manager Transparency Act of 2023 to the
Senate floor.
PBMs face increased
scrutiny
- The bill,
S.127, “bans deceptive unfair pricing schemes, prohibits arbitrary
clawbacks of payments made to pharmacies and requires PBMs to report to
the FTC [Federal Trade Commission] how much money they make through
spread pricing and pharmacy fees,” according to a press
release.
- The
Pharmaceutical Care Management Association (PCMA), the PBM industry’s
primary trade group, criticized the
legislation in a statement.
- “S.127
fundamentally misconstrues the role of pharmacy benefit companies and
unfairly proposes to take away employers’ choice and flexibility in how
they construe their pharmacy benefits to best fit the needs of their
patient populations,” PCMA president J.C. Scott said.
- Meanwhile,
Casey B. Mulligan, an economics professor at the University of Chicago,
testified during the hearing that the disclosure requirements in the
bill could “impose tens of billions of dollars in annual net costs by
discouraging competition among manufacturers, among pharmacies and among
PBMs.”
- At the hearing,
several politicians and speakers discussed the impact that PBMs have had
on small, independent pharmacies. Ryan Oftebro, Pharm.D., CEO and owner
of the four-store, independent Kelley-Ross Pharmacy Group in Seattle,
testified the proposed law is “a crucial piece of legislation to prevent
PBM abuses…that are harming patients by overinflating their prescription
drug costs and eliminating access to their preferred community
pharmacies across the country.
FTC report may spark
‘legislative push’
- Ryan Urgo,
managing director of health policy at Avalere Health, tells AIS Health
that the hearing and bill are part of “a broader effort by lawmakers
right now to apply more scrutiny to the PBM business model and certain
PBM business practices that lawmakers feel are either anticompetitive or
contribute to the broader growth of drug prices.”
- In June 2022,
the FTC announced it was
examining the business practices of the six largest PBMs and the
consolidation in the industry. The FTC has not released any information
on its findings, but Urgo expects the agency will likely announce what
it’s found by the end of the year.
- “It’s possible
that no real legislative action will occur until the FTC releases its
final report and that can be digested by policymakers,” Urgo says. “But
I do think that this hearing sets the stage for a legislative push
several months down the road from now.”
- “I would not
look at the hearing in isolation as a cause for concern [for PBMs], but
I would look at it as a precursor to eventual action that could be very
likely from Congress,” he adds.
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