Chief executives from the three largest pharmacy benefit managers (PBMs) steered around most of the difficult questions at a congressional hearing, repeatedly blaming rising prescription drug prices on drugmakers as they seek to avoid legislation that could change how they run their businesses.
The hearing, hosted by the House Committee on Oversight and Accountability, comes as bipartisan pressure on PBMs is driving legislative reforms in both the House, advanced via the Energy and Commerce Committee last December, and in the Senate, where the Finance Committee recently sought to renew PBM action.
On Tuesday, some of the most contentious questions came from Rep. Gary Palmer (R-AL), who asked the executives from PBMs CVS Caremark, Express Scripts and OptumRx how they can claim they reduce the cost of prescription drugs even as the spending on drugs overall has gone up every year for more than a decade.
The PBM executives said that they’re transparent enough and are saving money for their employer clients.
“Patients that we served in 2023 spent less out of pocket, on average, for 30-day prescriptions than they did in 2022, despite brand manufacturers raising prices,” said Adam Kautzner, president of Express Scripts, which is part of the insurer Cigna. The hearing was the third in a PBM-related series from the Oversight committee.
Palmer also questioned why some mail-order drug prices that are PBM-managed can be 35 times higher than prices from pharmacies. Kautzner said the ultimate decision on mail-order policies is up to employers.
“Our employers hold us accountable to ensure that we are administering benefits at their direction, that we are providing lowest net costs for patients,” Kautzner said.
Rep. Lisa McClain (R-MI) expressed frustration over the fact that PBMs don’t think they’re causing any problems.
“This is going to end with the PBMs being out of business,” she said.
An FTC report released earlier this month called for further investigations into the PBM industry. States are taking action too. According to the National Academy for State Health Policy, there are 24 state bills across 18 states to address prescription drug costs.
Arguing over Humira
At the hearing, lawmakers and PBMs brought up the example of Humira, AbbVie’s blockbuster drug that has long eluded competition from cheaper versions. Kautzner and David Joyner, president of CVS Caremark, cited the drug as an example of how pharma companies stretch the limits of their exclusive sales rights by using patent thickets to stymie competition from biosimilars.
But a report from the committee released Tuesday claimed that Express Scripts wanted to keep brand-name Humira at parity with biosimilar competition because of the high rebates it receives from the drug.
“In emails reviewed by the Committee, staff at Express Scripts highlighted that their account teams should not discuss Humira with their clients ‘due to rebate impact with Abbvie,'” the House Oversight report says. “These emails also expose that even though PBMs have the market power to negotiate when a biosimilar comes on the market, their negotiations do ‘not translat[e] to savings or value worth moving against the innovator.'”
In a statement to Endpoints News after the hearing, Express Scripts said, “we strongly disagree with the report’s unsubstantiated conclusions, which are not reflective of the thousands of documents we submitted and only included portions that serve a biased, incomplete narrative.”
Rep. Katie Porter (D-CA) also questioned the PBM execs on Humira, and why it took a year and a half for biosimilars to gain a foothold, noting that they saw 40% rebates from AbbVie’s brand-name version. CVS’ Joyner countered that 99% of those rebates negotiated with manufacturers were passed through to their customers, employers.
“There’s no doubt that Humira having competition is a good thing but you waited over a year to introduce the biosimilars,” Porter said.
Joyner said CVS did not wait to introduce the biosimilars but did so initially only at parity with the brand-name version. Traction for the biosimilar didn’t pick up until AbbVie’s brand-name version was removed from its formularies last April.
AbbVie declined to comment.
The committee’s report also looked at how the biggest PBMs have moved some operations overseas, setting up what are known as group purchasing organizations (GPOs) to centralize the negotiation of rebates and fees in Switzerland, the Cayman Islands and Ireland. The committee claimed those moves were made to avoid transparency and reforms, and the FTC has implied similar motivations.
Joyner countered that CVS’ subsidiary Cordavis was created in Ireland so it could be close to where its Humira biosimilar is being manufactured and to help with logistics.
“GPOs have been used within healthcare for decades and have been to shown to lower costs for clients and for patients,” Kautzner added.