Tomorrow, Tuesday, August 9th, at 10:15 AM, the Senate Finance Committee is holding its third hearing on rising prescription drug prices and the factors that contribute to them. It is called "Drug Pricing in America: A Prescription for Change, Part III" and will focus specifically on pharmacy benefit managers (PBMs) and how they are a major cause of increasing drug costs.
We hope the Senators will ask tough questions and not let PBMs off the hook. Below are some suggested questions for Senators to ask:
Q: You say that PBMs work to negotiate the best deals for everyone, that you lower drug prices, and that rebates are passed on to consumers. Yet PBMs fight transparency at every turn, and as a result we do not know what percentage of rebates actually reduce drug prices. And rebates have skyrocketed over the last few years to almost $153 billion. Why are you so opposed to transparency in the drug supply chain?
Q: Numerous states have launched investigations of PBMs and found that they are overcharging state governments and costing taxpayers money. For example, last year Ohio found that Optum earned over $223 million in spread pricing by charging Ohio's Medicaid more than they were charging pharmacies. And just a few weeks ago, Ohio Attorney General Dave Yost announced he was filing a lawsuit against OptumRx to recover $16 million. If PBMs are lowering drug prices for consumers, how do you explain this behavior?
Q: Currently three of you-OptumRx, CVS Caremark, and Express Scripts control 85% of the PBM market. Effectively this means an oligopoly controls this market, and means that companies have greater powers to raise prices because of less competition. How does that affect drug costs?
Q: Rebates that PBMs get from drug companies are usually based on a drug's list price. Therefore, the higher the list price, the greater the rebates, and the more profits the PBM earns. Doesn't this create a perverse incentive for PBMs to favor more expensive brand drugs and higher list prices, instead of negotiating better deals for consumers?