Wednesday's House hearing on the pharmaceutical supply chain included the expected finger-pointing by various industries -- drugmakers, pharmacy benefit managers (PBMs), and healthcare distributors -- at one another. But it also contained a few surprises.
One was an apology from David Marin, president and CEO of the Pharmaceutical Care Management Association (PCMA), a trade group for PBMs. "As an association, we have failed you," he told members of the House Energy & Commerce Health Subcommittee. "We have not done a good enough job articulating PBMs' value to you. We have not been the partner you need. We're going to change that ... My commitment to you today is that we will work with this committee to answer your questions, be a better partner, and help advance solutions that will make it easier and more affordable for your constituents to get the medications they need."
Marin was speaking the week after President Trump signed a bill that would prohibit PBMs from linking rebates to drug companies' list prices and require them to pass 100% of rebates to plans and sponsors. Marin also took a swipe at the bill, saying that his organization believes that "these mandates were both unnecessary and potentially harmful to our shared goal of affordability. But now we hope to move forward with you to focus on the issues at the core of our affordability challenges and ... to address the root causes of high drug prices."
On another front, Rep. Kim Schrier, MD (D-Wash.), took the opportunity to issue a warning to drugmakers. "As a pediatrician, I have to start with EpiPens," she said. "EpiPens can cost over $600 out of pocket. That's outrageous, especially for kids who have to have one at home and one at school. I want to call on manufacturers to drop the price or we will take congressional action."
PBMs also came in for a fair share of criticism. Rep. John Joyce, MD (R-Pa.), said that when biosimilars were launched for some adalimumab (Humira) biologics, "it was particularly alarming to me to hear from manufacturers that despite the dramatic decrease in list price, they were having problems getting any sort of traction with formulary placement, because PBMs preferred the higher-cost branded medication, because it meant a bigger rebate ... Honestly, it seems insane, given the PBM mission of lowering drug costs, [they would] prefer to keep prices high."
"Now to be fair here, I've heard from employers and the broker consultant companies that they work with to design their PBM [requests for proposals], they often build in rebate guarantees as part of their pharmaceutical contracts," Joyce added. However, "I am concerned rebate guarantees, especially considering the aforementioned Humira example, shift drug pricing behavior and incentivize manufacturers to launch at higher list prices and PBMs to prefer that higher-list-price, higher-rebate drug, even in situations when lower-list rebate alternatives might be available."
Rep. Buddy Carter, BSPharm (R-Ga.), a pharmacist who is often fiercely critical of PBMs, began by discussing a Federal Trade Commission report which found that the "Big Three" PBMs -- CVS Caremark, Express Scripts, and Optum -- "are charging enormous markups on dozens of life-saving drugs and reimbursing their affiliated pharmacies at a higher rate than they paid their unaffiliated pharmacies. I know because I had three unaffiliated pharmacies, and I know what the reimbursement was."
"In 2022 for example, a large share of the drugs were marked up by more than 1,000%," Carter noted, "and in fact, the pulmonary hypertension drug tadalafil [Cialis], pharmacies purchased [that] drug at an average of about $27 in 2022, but the three big PBMs marked up the drug by $2,079. They were paying their affiliated pharmacies $2,106 on average for a 30-day supply of the medication. That's an average markup of over 77,000%. In light of these findings, Mr. Marin, can you still stand by PCMA's claim that PBMs make healthcare more affordable and accessible?"
"I'd have to look at that case specifically," Marin said. "But I understand the concern about independent pharmacies across the country. They're critically important to the work we do. We can't do it without them. I think there is some good news from PBMs writ large -- reimbursing [independent pharmacies] at higher rates, for example, moving to 'cost-plus' contracts, reimbursing for the clinical services that they provide. But there's still a lot more work to do, and I look forward to doing that with you."
"Well, good," said Carter. "I hope that you're sincere in that, and I have no reason to believe that you're not, and I'm going to hold you to it."
Rep. Jake Auchincloss (D-Mass.) criticized the hearing itself, which included an unusually large number of witnesses from various stakeholder groups. "I don't think right now the moment calls for us to have nine witnesses," he said. "We need one witness, and that individual needs to be [FDA] Commissioner [Marty] Makary, whose incompetence and whose poor stewardship of the Food and Drug Administration is undermining the world's gold-standard biomedical regulator."
The FDA's rejection of an application for an mRNA flu vaccine, "which overruled career scientists at the agency, builds upon a pattern of replacing safety and efficacy with fear and favor," he continued. "One former FDA commissioner told me that FDA has hemorrhaged 20 years of competence and credibility in just the last [year], and yet we don't have a hearing. When is this committee going to do its constitutional job and bring Commissioner Makary here and ask him under oath what he is doing at the agency that keeps Americans safe?"
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