House Oversight Committee Grills PBM Executives
By Consumers for Quality Care, on August 6, 2024
The U.S. House Committee on Oversight and Accountability released a report last week detailing how the anti-competitive businesses of the pharmacy benefit manager (PBM) industry hurts health care consumers, according to reporting from The Wall Street Journal and Healthcare Dive. The report was released on the same day that industry executives were compelled to testify in Congress.
The House report found that PBMs intentionally steer consumers towards higher-priced medications over lower-priced alternatives, resulting in higher rebates for the industry. The report also found that PBMs push consumers to use their affiliated pharmacies instead of independently owned pharmacies. By doing this, PBMs increase the cost of health care while also reducing choice for consumers.
The report found specific examples of Cigna Group’s Express Scripts, one of the largest PBMs, favoring the arthritis drug Humira over similar medications priced at half the annual cost. The report also found that Express Scripts sent messages to consumers, saying that filling their prescriptions through the company’s mail-order pharmacy would be cheaper than going to their local pharmacy. By forcing consumers to use their own pharmacies, PBMs are pushing independent, mom-and-pop pharmacies out of business.
Additionally, PBMs hold much control over the price of medications, acting as the middlemen between pharmaceutical manufacturers and health insurers. But when PBMs negotiate prices, they often pocket the resulting “savings” for themselves instead of passing them along to the consumer.
The House Committee on Oversight and Accountability held a hearing on PBMs just hours after releasing their report. At the hearing, executives from the three largest PBMs – CVS Caremark, UnitedHealth Group’s Optum Rx and Cigna’s Express Scripts – were compelled to testify. Combined, these three PBMs control 80 percent of the drug prescription market.
Meanwhile, the Federal Trade Commission (FTC) is preparing a lawsuit against these PBMs over their business practices. Several state attorneys general and independent pharmacies have already filed lawsuits against the industry.
The mounting action against PBMs has lawmakers on the House Committee on Oversight and Accountability looking to reform the industry. “On one hand we have PBMs claiming to reduce prescription drug prices, and on the other hand we have the Federal Trade Commission, we have major media outlets like the New York Times and we have at least eight different attorneys generals, Democrats and Republicans, who all say PBMs are inflating drug costs,” said Congressman Raja Krishnamoorthi (D-IL). House Committee on Oversight and Accountability Chairman James Comer noted that “just about every state now is taking up PBM reform.”
CQC urges lawmakers and regulators to scrutinize harmful PBM practices that increase what consumers pay for prescription drugs.
