Senator Chuck Grassley (R-IA), chair of the Senate Finance Committee, and Senator Ron Wyden (D-OR), ranking member of the Finance Committee, have sent letters to the three largest pharmacy benefit managers (PBMs) demanding information and documents about how they contribute to rising insulin prices. The letters were sent to Express Scripts, CVS Caremark, and OptumRx, in preparation for the upcoming April 9th Finance Committee hearing on PBMs and drug costs.
According to a summary on the Finance Committee's website, "The letters are seeking information and documents related to PBMs’ business relationships with insulin manufacturers, public insurance programs and private insurance plans, as well as pharmacies. The letters also seek information about how PBMs determine the size of rebates and which drugs are available on formularies. Finally, the senators seek information about the types of patient health information that PBMs collect, evaluate and maintain, and how that information is utilized and protected."
Over 30 million Americans have diabetes, and insulin is used to treat this condition. In recent years, insulin prices have been skyrocketing, rendering the drug unaffordable for many consumers. Many folks have been forced to choose between paying for insulin or basic needs like housing and food, and some have even died because of these unaffordable costs! One woman testified about how the $1,700 monthly cost of insulin was a crushing burden for her son, who began rationing insulin even though that greatly harmed his health.
Both drug companies and PBMs have been pointing fingers at each other. Both parties are to blame for the rising costs of insulin and other drugs, but PBMs mostly escaped scrutiny until recently. The Senate Finance Committee hearing is a chance to change that. The PBM market lacks transparency or accountability and has massive conflicts of interest, PBMs are not well regulated at the state or federal levels, and PBMs often increase drug prices instead of lowering them. PBMs have incentives to get higher rebates, which are based on higher list prices. And until Congress outlawed the practice last year, PBMs often inserted gag clauses into their contracts with pharmacies, preventing them from telling patients about the most affordable ways of buying prescription drugs.
In their letter, Senators Grassley and Wyden write that "it is unclear whether PBMs are appropriately leveraging their power for the benefit of taxpayers and patients, especially patients who take multiple or high-cost medications." They also observed that "the industry continues to fight efforts to bring visibility to its operations." This is too true: PBMs lobby against both state and federal bills to encourage transparency in PBM markets.
Next week's hearing is a chance to shine a light on how PBMs operate and contribute to higher drug costs. Senators should take advantage of this opportunity.