Executives from the three largest pharmacy benefit manager companies testified Tuesday before Congress that rising drug prices in the U.S. are due to pharma companies taking advantage of market exclusivities and excessive charges.
At a congressional hearing on Tuesday, executives from the three largest pharmacy benefit manager companies insisted that their role as pharma middlemen help promote competition in the industry and effectively lower drug prices for U.S. consumers.
Tuesday’s hearing was held by the House Committee on Oversight and Accountability amid the growing bipartisan scrutiny on rising drug prices in the country and the role that pharmacy benefit managers (PBMs), as middlemen between drug developers and insurers, play in the problem.
However, in their testimony before the House panel, executives from CVS Caremark, OptumRx and Express Scripts shifted the blame onto pharma companies. Drug developers, the PBM execs claim, use and abuse elaborate patent protections and the lack of competition to charge excessive prices for their products.
“Last year, a new-to-market drug carried a median annual price of $300,000, and Humira, Ozempic and Stelara alone cost more than every generic drug, combined,” CVS Caremark President David Joyner said in a statement. “Brand products with little to no competition remain the chief source of rising drug costs.”
“Thanks to a strategy of patent manipulation, AbbVie blocked any competition, and [Humira] became the single most expensive drug for our customers and their members,” Joyner said, noting that PBMs work with employers, unions and state health plans, helping them to negotiate lower drug prices from pharma companies.
In response, Rep. Ayanna Pressley (D-Mass.) expressed frustration, calling the persistently high costs of prescription medications “an injustice,” which PBMs play a big part in due to their policies. “Families have been robbed of their loved ones due to the delays, the greed and harmful policies of PBMs.”
Prior to the start of Tuesday’s hearing, the House Committee on Oversight and Accountability released a report on PBMs, revealing that they deploy “deliberate, anticompetitive pricing tactics” that increase the prices of prescription medications. These practices can undermine local and independent pharmacies across the U.S. making effective drugs inaccessible for many patients, according to the report.
The Federal Trade Commission (FTC) earlier this month also released a damning report on PBMs. According to the FTC, these middlemen “wield enormous power” over the accessibility of prescription drugs, allowing them to “significantly influence” what medications are made available and at what price.
The FTC is reportedly preparing to sue the three largest PBMs over their negotiation practices, which have allegedly pushed patients away from more affordable treatment options.
