Pharma executives got the ire of lawmakers in February. On Tuesday, it was the PBMs’ turn.
Transparency, transparency, transparency
It’s hard to remember the last time “transparency” was uttered so many times, at least on Capitol Hill. Senators criticized the opaque system of rebates and negotiations, and PBM executives responded by proclaiming their support of transparency. However, one area where the execs wouldn’t give was making their negotiations public.
They supported price transparency for doctors and patients, as well as reporting negotiations and rebates to the government, but allowing other PBMs to see their data was a non-starter. Every one of the five PBM leaders argued against making negotiations and rebates widely available.
Rebates on the chopping block
Several senators suggested that rebates between PBMs and pharma should go away. The execs were cagey on the idea. They said they have other ways of negotiating with companies and providing cost savings to patients, but one exec relented that it would make business tougher. OptumRx CEO John Prince said that no rebates “would take a lot of value out of the system and increase costs.”
The ghost of pharma
PBMs are not pharma, but they repeated similar talking points from the pharma drug price hearing. PBM execs, like their pharma counterparts, supported market forces to control prices, like competition from generics or biosimilars or making the price of a drug public to allow patients or doctors to choose the lower-cost option. They were also more wary of government intervention to lower drug prices or force companies to be more transparent.
Sen. Sheldon Whitehouse (D-RI), however, noted that PBMs are a significantly smaller piece of the drug market. “I’m in awe of the pharma industry’s jiujitsu magic to have gotten their prime antagonists to become the focus of the problem,” he said.
Focus on mega-mergers
All of the PBMs testifying are affiliated with insurers. Some senators took the opportunity to question whether those tie-ups are anti-competitive. Naturally, the executives defended the mergers. While these mergers and buyouts, most recently between CVS and Aetna and Cigna and Express Scripts, were approved by the Justice Department, lawmakers were more skeptical that they’re good for drug costs.