PBM bills drove lobbying spending in 2023

If enough evidence didn't already exist that pharmacy benefit managers are the target of the year on Capitol Hill, taking the old advice to follow the money confirms it: Legislation about the drug supply middlemen has been the most heavily lobbied in 2023.

According to federal data compiled by OpenSecrets, seven of the 11 most-lobbied bills during the first three quarters largely focus on curbing PBM business practices and promoting lower prescription drug prices.

Related: Congress eyes endgame for PBM legislation

Several bills have been far and away the most lobbied healthcare measures in 2023. Leading the way in the sheer number of lobbying reports filed to Congress was the Pharmacy Benefit Manager Transparency Act of 2023, a Senate Commerce Committee measure that would ban so-called spread pricing, bar PBMs from linking their compensation to high drug list prices and require extensive public disclosures. Lobbyists filed 88 reports indicating they were trying to sway lawmakers on the bill.

Next was the Pharmacy Benefit Manager Reform Act of 2023 from the Senate Health, Education, Labor and Pensions Committee, which includes provisions similar the Commerce Committee bill and rang up 64 reports.

The third most-lobbied bill was the PATIENT Act of 2023 from the House, which features a grab bag of provisions, including some akin to those in the Senate proposals, and recorded 62 reports. A slimmed-down version of that bill, the Lower Costs, More Transparency Act of 2023, included many of the same PBM provisions and racked up 44 lobbying reports. Taken together, they represent the most-lobbied issue, with 106 reports.

Looked at slightly differently, the Lower Costs, More Transparency Act was the top target of the highest-powered lobbyists. All of the top-10 healthcare influence organizations filed reports disclosing efforts to influence Congress on the measure.

While it is virtually impossible to determine how much is spent on specific bills because individual reports generally list several pieces of legislation, the overall spending reflects similar patterns.

Healthcare lobbying spending reached $537 million during the first three quarters of 2023, up about 3% compared with the same period last year. But within that spending, interest groups and companies that care a lot about PBMs were up most dramatically.

The most obvious example is the Pharmaceutical Care Management Association: The PBM trade group's spending spiked 67%, to $10.1 million. Likewise, expenditures for UnitedHealth Group, which owns the OptumRx PBM, jumped 94%, to $9 million.

From PBMs' perspective, they are being forced to spend more to defend themselves, at least in part because the pharmaceutical industry has mounted a campaign to shift the onus for high drug prices away from itself.

"This year, Congress has held an unprecedented number of hearings focused on PBMs as Big Pharma continues its extraordinarily high advertising spending to blame-game others for high drug costs," said Greg​ Lopes, an assistant vice president at the Pharmaceutical Care Management Association. "It is imperative to educate lawmakers on the value PBMs provide to the healthcare system by lowering prescription drug costs and helping improve health outcomes."

Last year, the Pharmaceutical Research and Manufacturers of America was on the losing end of its battle against the Inflation Reduction Act of 2022, which allows Medicare to negotiate prices for the most expensive drugs. PhRMA lobbying spending declined 6%, to $21 million, during the first three quarters of 2023. PhRMA declined to discuss its strategy.

That dip caused PhRMA to lose its No. 1 ranking among healthcare lobbying organizations, with the Blue Cross Blue Shield Association and its affiliated companies taking the top spot so far this year by increasing expenditures more than 5%, to $21.6 million.

While PBMs are only one of the many issues that both PhRMA and the Blue Cross Blue Shield Association care about, both have strong interests in the area. For Blue Cross, as with other insurers, PBMs can help support their bottom lines when they keep some of the rebates and other savings that PBMs negotiate, instead of passing it along to policyholders.

Asked about its lobbying, however, a Blue Cross Blue Shield Association spokesperson preferred to focus on other issues, such as policies to address the hospital industry practice of charging inpatient rates for off-site care.

“There is a real opportunity to advance bipartisan legislation that will bring down the cost of healthcare for all Americans. Commonsense solutions like the SITE Act and FAIR Act would reform and improve hospital billing and save patients, businesses and taxpayers hundreds of billions of dollars over the next decade," said David Merritt, senior vice president of policy and advocacy at the Blue Cross Blue Shield Association, referring to a pair of bills in that would require hospitals to charge less for outpatient care.

The American Hospital Association is on the other side of the so-called site neutrality issue and boosted its lobbying expenditures during the first nine months of the year nearly 11%, to $20.1 million, which was enough for third place in the rankings. The hospital sector is also lobbying on subjects such as price transparency, anti-competitive hospital contracting and Medicaid cuts.

"The AHA is committed to making sure all policymakers understand the value and contributions of hospitals and health systems as well as the challenges they face," AHA Executive Vice President Stacey Hughes said. "It’s no secret that the last couple of years have been very difficult for hospitals and that more than half ended 2022 in serious financial distress. It is AHA’s responsibility to engage meaningfully with policymakers from both sides of the aisle to tell the stories of our members and help find solutions that support them so they can continue to care for their communities."