Sen. Josh Hawley, R-Mo, speaking Tuesday at a Senate Judiciary Committee hearing on pharmacy benefit managers. Credit: Senate Judiciary Committee
Sen. Josh Hawley, R-Mo., demanded Tuesday that Congress move to stop insurance companies from owning pharmacy benefit managers.
CVS Health owns Aetna and the Caremark PBM, Cigna owns Express Scripts and UnitedHealth owns Optum Rx.
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Juan Carlos Scott, chief executive officer of the Pharmaceutical Care Management Association, a PBM group, said at a Senate Judiciary Committee hearing on competition in the prescription drug supply chain that tough employer bargaining is already changing how the PBM market works.
He agreed that the prescription drug market needs more competition, including patent reforms.
Hawley — part of a bipartisan group of lawmakers that has been lobbying for restrictions on the big PBMs and their owners — reacted angrily to Scott's comments.
Related: Sen. Warren brings bipartisan team back for more action against PBMs
"Don't you think the competition we really need is to break up this alliance between insurance companies and PBMs?" Hawley asked, "The biggest three PBMs are owned by the biggest insurance companies. You're like one huge, giant pharma industry. A giant pharma series of monopolists. Why is it a good idea for the biggest PBMs to be owned by the biggest insurers, and now you're buying pharmacies as well."
Hawley also talked about the "pharmacy desert" issue, or the concern that changes in the prescription drug market are leaving some patients without ready access to pharmacies.
"In the state of Missouri just last year, we lost 73 independent pharmacies across my state in 19 different counties," Hawley said.
"Do you know that two entire counties in the state of Missouri now have, wait for it, zero pharmacies?" Hawley asked. "You're making $7.3 billion, you and the companies that you represent, and yet two whole counties in the state of Missouri have no pharmacies. Why should we be breaking you guys up? This looks like classic monopolist behavior: The patients are getting screwed, Missourians are getting screwed, and you're getting rich."
The committee posted a video of the hearing on its website.
The rebate issue: Scott argued that market forces are already addressing some of the complaints that have made headlines in recent years, such as the arguments that PBMs are hogging the drug price discounts that they negotiate with the manufacturers.
Today, Scott said, employers have always had the option to ask for provisions that direct all rebates to them, or "rebate pass-through" provisions, and that employers are now demanding and getting a bigger share of the rebates.
"They have the optionality to choose to get 100% of them," Scott said. "We have seen a lot more of that pass-through model in the last year to 18 months. We have had one of the big three PBMs say, 'We're going to do only 100% rebate pass.'"
The political backdrop: President Donald Trump weighed in on the prescription drug supply chain debates in April by calling for his administration to look at all players involved, including the PBMs, and again Monday, by calling manufacturers to make sure that U.S. patients get prices comparable to what patients in other rich countries are paying.
Committees in Congress are considering many PBM bills. Many of the PBM bills have both Republican and Democratic cosponsors.
The PBMs contend that they are under attack because they are facing pushback for their successful efforts to hold down what patients pay for prescription drugs and to narrow other drug supply chain players' profit margins.
The price backdrop: One challenge for policymakers is determining just how drug prices in the United States really compare with those in other countries.
Margaret Kyle, an economics professor at the Center for Industrial Economics in Paris, reported in a paper published in the current issue of the Journal of Economic Perspectives that U.S. patients are paying about four times as much for brand-name drugs as patients in Canada, France, Germany, Italy, Japan, Mexico and the United States but only about half as much for generic drugs.
The percentage of U.S. health care spending going toward paying for prescription drugs is much lower than in other rich countries and has been falling in recent years, according to Kyle's analysis.
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