House committee latest to launch investigation into PBMs

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Table of Contents

diving letter:

  • According to a press release from Chairman James Comer, R-Ky, the House Oversight and Accountability Committee is launching an investigation into pharmacy benefits administrators over alleged anti-competitive tactics.
  • It’s the latest action targeted at PBM for allegedly using their market power to raise drug prices amid mounting scrutiny, and comes as the Federal Trade Commission also launched a similar investigation.
  • According to a press release, Comer requested documentation on PBMs’ practices from the Office of Personnel Management, the CMS and the Defense Health Agency to determine how they affect health programs administered by the federal government.

Dive insight:

PBMs — who negotiate rebates with manufacturers on behalf of a health insurance plan and act as middlemen between drug manufacturers, health plans and pharmacies — have recently attracted attention for their role in rising prescription drug prices.

In January, California sued a number of large drugmakers and PBMs for allegedly overcharging patients for insulin, alleging that the manufacturers artificially inflated list prices and PBMs received a larger percentage of the list price of drugs, which it says is a discount becomes.

Concerns about PBM practices prompted the FTC last year to launch an investigation in which the agency asked the country’s six largest PBMs — CVS Caremark, Express Scripts, OptumRx, Humana, Prime Therapeutics, and MedImpact Healthcare Systems — to share detailed information their business practices.

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Shortly thereafter, the FTC voted unanimously to issue a policy statement to further analyze fees and rebates paid to PBMs in exchange for coverage for their medications by payers.

While the FTC has yet to complete its PBM investigation, the House Committee is now requesting information from agencies and PBMs regarding the role the middleman plays in state health programs.

“Federal agencies that administer health care programs for the elderly, active military and federal employees rely on PBMs as middlemen to set drug prices, opening the door to government waste at the expense of American taxpayers,” Comer said in the release.

According to the press release, three PBMs control an estimated 80% of the market: CVS Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s OptumRx.

Committee members previously analyzed PBMs in a December 2021 report, finding that PBM consolidation has increased costs to consumers, prompted manufacturers to raise their prices, and ultimately had a negative impact on patient health.

Comer sent letters to OMB, CMS, DHA, CVS Caremark, Express Scripts and OptumRX as part of the investigation.


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