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What to Expect at the Senate PBM Hearing

Analysis  |  By Jack O'Brien  
   April 08, 2019

Executives from five major PBMs will take center stage on Capitol Hill Tuesday morning.

The Senate Finance Committee continues its hearings on high prescription drug prices Tuesday as it hosts executives from five major pharmacy benefit managers (PBM).

Executives from Cigna Corp., CVS Health, Humana Inc., OptumRx, and Prime Therapeutics LLC will testify before the committee, six weeks after executives from seven major drug manufacturers discussed how to combat the issue of rising prescription drug prices.

Senate Finance Chairman Sen. Chuck Grassley, R-Iowa, has made addressing high prescription drug prices one of the committee's main priorities since he took over in January, a bipartisan mission shared by Ranking Member Sen. Ron Wyden, D-Ore.

Taking action to ensure accountability from PBMs stretches well beyond the halls of Congress, as President Trump and HHS Secretary Alex Azar have taken aim at the healthcare 'middlemen' through regulatory reform focused on drug rebates. 

In February, the administration announced a proposed rule to eliminate PBM rebates, which Alex Brill, CEO at Matrix Global Advisors, panned by saying that the move will "increase revenues and reduce costs for drugmakers."

For their part, drugmakers praised the proposal during their testimony before the committee, adding that they would look into lowering drug list prices should the rule be finalized.

Related: 4 Takeaways From Pharma Testimony at Senate Drug Pricing Hearing

The committee has held two prior hearings in its "Drug Pricing in America: A Prescription for Change" series, twice on the role of drug manufacturers relating to high list prices, though the second meeting was the first to include public testimony from pharmaceutical executives. 

Grassley and Wyden publicly aired their frustrations when drugmakers skipped the first hearing. However, PBM executives were quick to accept their invitation to Capitol Hill, as all five announced plans to attend by mid-March.

Determining who is most responsible for the high prescription drug prices facing consumers has turned into something of a blame game, as pharmaceutical executives pointed the finger at PBMs during the February committee hearing.

Drugmakers referred to PBMs as powerful negotiators who routinely cause price increases that are shouldered by consumers, though some PBM representatives countered that pharmaceutical companies benefit from maintaining the status quo.

In a press statement regarding Cigna's price cap on out-of-pocket costs for insulin, Grassley called on drugmakers and PBMs alike to "stop pointing fingers" and focus on extending the price cap to other high-priced prescription drugs.

Related: Sen. Chuck Grassley Questions Insulin Pricing Efforts

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

Photo credit: WASHINGTON - JULY 18: A sign at the entrance to a Senate Finance Committee hearing room in Washington, DC on July 18, 2017. The United States Senate is the upper chamber of the United States Congress. - Image / Editorial credit: Katherine Welles / Shutter


KEY TAKEAWAYS

The Senate Finance Committee and the Trump administration have sought accountability for high prescription drug prices.

In February, drugmakers testified that PBMs are partly responsible for the issue facing patients nationwide.

A recent PBM-backed study panned the proposed drug rebate rule released by HHS in February.


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