House joins in legislators’ calls for new oversight of PBMs

A committee of the U.S. House of Representatives hopes to round up federal records relating to pricing practices of pharmacy benefit managers (PBMs).

The House Committee on Oversight and Accountability, led by Chairman Rep. James Comer (R-Ky.) announced its own investigation into PBM “tactics that are harming patient care and increasing costs for consumers.” Comer has asked federal agencies that deal with health care to turn over documents and communications about PBMs’ effects on their respective programs.

“Pharmacy Benefit Managers’ anticompetitive tactics are driving up health care costs for Americans and harming patient care,” Comer said in a statement this month. “Federal agencies administering health care programs for seniors, active-duty military, and federal employees rely on PBMs as middlemen to set drug prices, which opens the door to government waste at the expense of American taxpayers.

Greater transparency in the PBM industry is vital to determine the impact that their tactics are having on patients, the pharmaceutical market, and health care programs administered by the federal government,” Comer’s statement said. “The House Oversight and Accountability Committee is shining a light on this issue in the healthcare system and will continue to examine solutions to make prescription drugs more affordable for all Americans.

Requesting information

The House Committee has sent letters seeking papers and policies from PBM leaders: Express Scripts President Adam Kautzner, CVS Caremark President David Joyner, and OptumRx CEO Heather Cianfrocco.

The Committee also sent requests for information to Kiran Ahuja, director of the U.S. Office of Personnel Management; Chiquita Brooks-LaSure, administrator for the Centers for Medicare and Medicaid Services; and Seileen Mullen, assistant secretary of defense for health affairs in the U.S. Defense Agency.

The requests ask for responses by March 15.

View from the House

It was unclear whether the documents would shed new light on PBM business models and pricing practices. But some effects already are known.

In December 2021, Comer, as ranking member of the House Committee on Oversight and Reform, published “A View from Congress: Role of Pharmacy Benefit Managers in Pharmaceutical Markets.” That report outlined findings about PBMs, which consolidated in the prior 10 years, pushing up drug prices three times faster than inflation and driving patient out-of-pocket costs up by 53%.

Among the key findings:

• PBM practices affect patient health.
• PBMs use market leverage to increase profits, not drop consumer costs.
• Drug makers raise prices due to PBMs.
• PBM ownership of pharmacies creates conflicts of interest and hurts competition.
• Greater transparency is needed to determine how PBM tactics are huring patients and the marketplace.

More demands for investigation

The House Committee on Oversight and Accountability is not alone. In the Senate, Sen. Chuck Grassley (R-Iowa), ranking member of the Judiciary Committee, and Maria Cantwell (D-Wash.), chair of the Committee on Commerce, Science, and Transportation, have reintroduced two bills that aim to bring transparency to the PBM industry and its pricing practices.

Meanwhile, the Federal Trade Commission (FTC) last year announced an inquiry into the business practices of the six largest vertically integrated PBMs in the nation. That inquiry remains pending.

PBMs respond

In recent months, PBMs have defended their business practices in news releases and public statements.

In February the Pharmaceutical Care Management Association (PCMA) launched a seven-figure, 10-month advertising campaign to “educate policymakers and the public on the critical value of America’s pharmacy benefit companies and proactive policy solutions the industry is supporting to lower prescription drug costs for patients.”

“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,” PCMA President and CEO JC Scott said in a statement.

In an FTC meeting last year, PCMA Chief Policy and External Affairs Officer Kristin Bass argued PBMs are the industry using market forces to push drug makers and pharmacies to lower prices for patients and health plan sponsors. It is in the interest of drug manufacturers and pharmacies for the FTC to target PBMs, she said.