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A member of the Senate Finance Committee is making a public effort to accuse CVS Health of using its Caremark pharmacy benefit manager and Aetna health insurance operations to hurt independent and community pharmacies and drive up health care costs.
Sen. Marsha Blackburn, R-Tenn., said earlier this week that she has sent a letter to David Joyner, the chief executive officer of CVS, "pressing him on the company's lengthy record of fraud and regulatory violations at taxpayers' expense and the role the company has played in driving up health care costs."
Blackburn argued that CVS and Aetna have played a role in increasing health insurance premiums, and, in turn, to increase federal government spending on the Affordable Care Act premium subsidies that consumers use to pay for individual and family health coverage purchased from an ACA public exchange.
"In 2024 alone, federal dollars accounted for 24% of CVS's total revenue, about $89.48 billion, up from 18% in 2022," according to Blackburn's letter. "From 2022-2024, federal spending drove more than 60% of CVS's revenue growth."
Blackburn also cited reports by Tennessee independent pharmacies that CVS Caremark and other PBMs "are failing to provide fair reimbursement in favor of driving patients to their own pharmacies."
"We have received the letter and plan to respond," CVS said in a statement responding to Blackburn's letter.
What it means: Employers and benefits advisors may support efforts in Congress to rein in big health insurers and big PBMs but hope that Congress will protect any of those players' fair and effective strategies for holding down prescription benefits costs.
The conflict between the insurers, the PBMs, the pharmacies and the drug manufacturers could have an immediate effect on the fate of two pieces of legislation that are in play now: the Lower Health Care Premiums for All Act bill and a push by House Democrats and some House Republicans to maintain a high level of ACA premium subsidy levels for a year or more.
The Lower Health Care Premiums for All Act bill: Provisions in the Lower Health Care Premiums bill would make employer health plan PBMs give plan sponsors detailed tracking reports; help small employers use association health plans to buy health coverage; and create a new legal framework for individual coverage health reimbursement arrangement plans, or ICHRA plans.
The ACA subsidy cliff: The current ACA subsidy levels, which were adopted in response to the COVID-19 pandemic, are set to expire Dec. 31.
The "ACA subsidy cliff" could lead to enrollees' own spending on exchange plan coverage to double in 2026, and it could increase spending for relatively high-income, four-person households headed by parents in their 50s or 60s to increase to more than $30,000 per year, from less than $10,000 per year this year.
The backdrop: Republicans who were trying to add an ACA subsidy boost extension provision to the Lower Health Care Premiums for All Act bill reported during a House Rules Committee meeting on the bill Tuesday that the House parliamentarian had stripped some PBM provisions out of their own ACA subsidy boost extension legislation.
A House Rules member, Rep. Austin Scott, R-Ga., emphasized his anger about health insurers' and PBMs' role in the prescription drug market.
"This member wants to prohibit the health insurance industry from owning pharmacy benefit managers," Scott said.
Scott said he believes that the Federal Trade Commission already has the authority to stop health insurers from owning PBMs.
"Maybe our Federal Trade Commission should wake up and actually do their job and prohibit the insurance industry from owning PBMs," Scott said.
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