Trade groups representing pharmacy benefit managers (PBMs) and drug companies are squaring off over the airwaves. 

The latest salvo, which came on Tuesday, is a consumer ad campaign highlighting how PBMs support affordable care by pushing for lower prescription drug prices and fostering competition.

Trade group Pharmaceutical Care Management Association (PCMA) said the campaign, estimated to be a seven-figure effort, is designed to educate policymakers and the public. PCMA plans to run digital and television ads nationwide over the next 10 months.

“Pharmacy benefit companies play a critical role working every day to secure savings, enable better health outcomes and support access to quality prescription drug coverage for patients,” said PCMA president and CEO JC Scott in a statement. 

PCMA’s ad blitz comes roughly six months after its counterpart representing the drug industry, Pharmaceutical Research and Manufacturers of America (PhRMA), unleashed a seven-figure ad campaign of its own. 

That effort took PBMs to task for driving up prescription costs by not sharing negotiated savings with patients. The campaign also debuted as the Federal Trade Commission greenlit a probe into the allegedly anti-competitive practices of the largest PBMs and the corresponding effect on drug price.

The dueling campaigns also come as the effort to reform PBMs heats up on Capitol Hill. Advocates for reforms say Congress is getting set for a wave of hearings and legislation, as lawmakers critical of the industry gird for action.

They include Sen. Maria Cantwell (D-Wash.), chair of the Senate Commerce Committee, who held a hearing on PBM transparency last week. As reported by Politico, at the hearing, Cantwell stressed a provision she reintroduced with Sen. Chuck Grassley (R-Iowa), the first in a line of potential measures from congressional leaders with jurisdiction over the industry.

For years, lawmakers have tried – but come up short – to reform the way the industry works, including a 2019 Senate hearing and a House panel on insulin pricing. But multiple factors make the possibility of getting something done this session a real one.

Along with the louder calls for change and panels led by powerful PBM critics, Politico reported two major drivers. 

One was last year’s passage of the Inflation Reduction Act (IRA), which permits Medicare to negotiate the cost of some drugs, clearing the way for Congress to switch focus from manufacturers to PBMs. Two, states have enacted more than 100 PBM-related laws – evidence, perhaps, that the political will exists for federal legislation. 

PBMs have countered that their role is not well understood. The PCMA TV spots, dubbed “Commitment” and “Every Day,” note that PBMs released their own policy proposals this year, calling on Congress to end patent abuse by drugmakers and support more competition. 

Addressing PhRMA’s accusation that savings aren’t passed on to plans for lower premiums, the ads claim that PBMs save employers and patients more than $1,000 per person annually by negotiating with drugmakers for price concessions. 

“PCMA’s new educational campaign highlights the irreplaceable value of America’s pharmacy benefit companies and builds on our commitment to supporting an affordable future for patients by promoting solutions to increase competition as the best way to address the root cause of high drug prices,” added Scott.

One talking point the ads don’t directly address is transparency. PBMs’ largely opaque system of rebates and negotiations was one practice that senators criticized at the 2019 hearing. Apparently, many of the proposals now circulating, including those relating to transparency, are ones the companies already must comply with. 

Then there are the rebates themselves, deep discounts which PBMs negotiate on branded drugs in return for favorable formulary placement, even if those drugs may have a high list price.  This year the country’s three largest PBMs — CVS Caremark, Express Scripts and OptumRx — are each excluding around 600 drugs from their standard formularies, according to a recent analysis from the Drug Channels Institute. 

That’s a high point. Caremark excluded about two dozen additional drugs from its formulary in 2023 versus 2022. Express Scripts and OptumRx bumped 43 and 19 more therapies, respectively. 

To be clear, exclusion doesn’t necessarily mean patients lose access, as plan sponsors don’t have to adopt their contracted PBMs’ standard formularies. Not doing so, though, could lead them to face reduced rebates.

Critics of rebates contend that they create an incentive for manufacturers to raise list price because drugmakers think PBMs prefer high-cost drugs with big rebates over cheaper meds.

“Formulary exclusions have emerged as a powerful tool for PBMs to gain additional negotiating leverage against manufacturers,” wrote Drug Channels Institute CEO Adam Fein. “The prospect of exclusion leads manufacturers to offer deeper rebates to avoid being cut from the formulary. Exclusions are one of the key factors behind the large gap between list and net prices for brand-name drugs.”

As another industry pundit commented, what the growing exclusion lists show, ultimately, is that the rebate model remains “alive and well.”