U.S. pharmaceutical industry intermediaries defended their role in the health care system during a Congressional hearing amid accusations of steering patients toward expensive treatments despite available lower-cost options.
A House Committee on Oversight and Accountability report released earlier on Tuesday indicated that pharmacy benefit managers (PBMs) compel drugmakers to pay rebates for placing their branded drugs in favorable positions on lists of medications covered by various insurance plans.
In testimony before the committee, executives from the top three U.S. PBMs—UnitedHealth's OptumRx, Cigna's ExpressScripts, and CVS Health's Caremark—argued that their business models save health plan members money, including plans run by labor unions.
They attributed the high costs to "patent abuses" by drug manufacturers, which delay the launch of cheaper generic and biosimilar medicines. They also cited the high launch prices of new drugs as a contributing factor.
Pharmaceutical executives, conversely, have consistently blamed PBMs for high prescription drug costs.
David Joyner, President of CVS Caremark, testified that a new-to-market drug had a median annual price of $300,000 last year. He stated that the costs of AbbVie's arthritis treatment Humira, Novo Nordisk's diabetes drug Ozempic, and Johnson & Johnson's Crohn's disease treatment Stelara collectively exceed the total cost of all generic drugs combined.
Joyner highlighted the "overwhelming" prices of GLP-1 drugs used for weight loss, estimating that costs would surpass $1.2 trillion annually if all obese individuals received one.
According to Joyner, Novo's Ozempic and Wegovy, along with Eli Lilly's Mounjaro, accounted for more than two-thirds of the increased costs for Caremark customers in 2023.
Committee Chair James Comer accused PBMs of deflecting responsibility for drug pricing onto manufacturers. "That's not what we hear from doctors and pharmacists across America," Comer stated.
Pharmacy benefit managers manage prescription drug benefits for health insurance companies, large employers, and Medicare prescription drug plans.
According to Representative Jamie Raskin, the PBMs at CVS, UnitedHealth, and Cigna control 80% of prescription drugs dispensed in the U.S. The committee's report stated that these intermediaries have enacted anti-competitive policies to protect their profits and share patient data among business units to steer patients toward their own pharmacies.
Additionally, the report noted that these companies have started moving some operations abroad to avoid transparency and proposed reforms.