Senate Hearings on Drug Pricing: PBMs Pass Blame Back to Drug Makers

If you thought that the Senate hearings on pharmaceutical rebates and pricing was going to help clarify what might be the best avenue for the administration to promote biosimilar access, well, you should have known better. With enough finger pointing to go around, the pharmacy benefit managers and health plans represented at these hearings passed the ball about as well as the Harlem Globetrotters during their pregame routines. It was entertaining but not very elucidating.

Senate hearings on pharmaceutical rebates

One interesting view expressed by Steve Miller, MD, former CMO of Express Scripts and now Executive Vice President and Chief Clinical Officer for the PBM’s new parent Cigna, said that the problem was that marketing exclusivity was too long for the reference biologics. “One of the biggest problems facing the industry is the lack of biosimilars that have come to the marketplace,” he pointed out, placing the blame on the overwhelming patent issues. 

The hearing held on April 9 was chaired by Senator Chuck Grassley (R-IA) and co-led by Senator Ron Wyden (D-OR). Senator Wyden said, “This morning the committee is going to be looking at one of the most confounding gnarled riddles in American health care today…whether pharmacy benefit managers bring any value to the taxpayers is a mystery.”

At a previous hearing in February at which the pharmaceutical companies provided their side of the story, the drug makers pointed to the PBMs and the need for rebates, alleging that they failed to pass through the contracted discounts to patients.

On the other hand, the PBMs blamed the pharmaceutical companies for the high list prices and limited discounts, which require rebating tactics to gain an equitable net price. In its defense, CVS Health claimed that its ability to obtain significant rebates is “a powerful tool to offset” the WAC prices set by drug makers. In response to attacks on the confidentiality of rebating deals, which benefit plans and PBMs rather than patients, they responded that these negotiations do not contribute to higher drug costs. Instead, they help secure the deal-making power of the plan or PBM.

The PBMs did argue a strong case against drug licensing and pay-for-delay deals, which extend beyond generic drugs into the biosimilar space (e.g., AbbVie on Humira). The health plan representatives also emphasized once again that stripping away the rebates would likely result in higher premiums.

One would not call the hearings “clarifying” in any respect. However, it did provide the companies a more public forum to state their positions with regard to the rebate issue and as to the value of their negotiations to the health system in general.

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