I’ve also partnered with Senator Wyden on
a 2-year investigation into insulin
price gouging. Our investigation found that the PBM scheme encourages drug
makers to spike the drug’s list price in order to offer a greater rebate, and
in turn, secure priority placement on covered meds, at the expense of many
patients.
In
addition, I’ve worked on bipartisan
reforms to lower prescription drugs. But there’s more we can do.
Imagine
a world where a cheaper product – yet equally effective – has a harder time
selling. That’s the prescription drug industry.
One
of the primary reasons for this problem is pharmacy benefit managers.
Recently, a biosimilar
competitor to the high-cost Humira drug – entered the market. While its
competitor offers a 55% discount to its list price, the competitor cannot
access patients. Why? According to the Wall Street Journal, “PBMs and health
plans are expected to prefer the more expensive version to get the higher
rebates.”
You
heard it correctly: PBMs are blocking a cheaper product. This mirrors what my
insulin investigation found – now playing out with other drugs.
PBMs
will claim they pass on savings to consumers or through lowering premiums,
but
their spread pricing and clawback tactics prove otherwise. When a PBM goes with
a higher price product, consumers may pay more out of pocket before their
deductible kicks in or through co-insurance.
Today,
three PBMs control 80 percent of the market. We
must do something about powerful middlemen to lower drug costs for
consumers.
In 2018, I asked the Federal Trade
Commission to assess consolidation in the pharmaceutical supply chain and its
impact on drug prices. It took until last year for the FTC to take action and start
studying PBMs. Its welcomed action, but it’s not enough.
To
ensure a timely FTC report, last week, the Judiciary Committee passed out on a
voice vote the Prescription Pricing for the People
Act,
a Grassley-Cantwell bill. It requires the FTC to study pharmaceutical
intermediaries and issue a report and recommendations to Congress within one
year.
A
timely report on PBMs is
critical, but we can stop some anti-competitive behavior right now. The
Cantwell-Grassley PBM Transparency Act directs the FTC to
end well-known and documented PBM practices that drive up consumer costs,
namely: spread pricing and clawbacks. Both actions game the system and hurt
consumers.
Our
bill has guardrails – it doesn’t give the FTC any new power or regulatory
authority. The bill also puts sunshine on PBMs.
Passing the PBM Transparency Act is an important step to lowering to drugs
costs.
