Lawmakers and executives from three major pharmacy benefit managers presented diametrically opposing views at a heated Capitol Hill hearing Tuesday, as major bills aimed at reining in the organizations remain stalled in Congress.
Members of the House Committee on Oversight and Accountability blamed the highly concentrated PBM industry for raising drug prices and running independent pharmacies out of business, while leaders from CVS Caremark, Express Scripts and Optum Rx all countered that the sector in fact lowers prices and supports local pharmacies.
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The hearing accompanied the committee's release of a report detailing what its investigators characterized as abuses by the three large companies.
"While PBMs' position as middlemen should have enabled them to reduce the costs of prescription drugs and improve Americans’ health outcomes — they have not," said Oversight Committee Chair James Comer (R-Ky.), opening the hearing by summarizing the report's findings. "Instead, the cost of prescription drugs has gone up every year for 15 years. Instead, patients have less choice and worse health outcomes."
Comer and other lawmakers ran through numerous issues that they blamed on PBMs, including driving independent pharmacies out of business, raising costs for patients, and using things like step therapy rules to deny access to expensive drugs when doctors prescribe them.
Several pointed to a recent Federal Trade Commission report that reinforced many of their claims, as well as data showing that CVS Caremark, Cigna Group's Express Scripts and UnitedHealth Group's Optum Rx dominate the pharmacy market. The FTC is reportedly preparing to file suits against the three.
"The three PBMs represented today, independent of their parent companies, are so big that you would all fall within the top 40 businesses in America by revenue," said the ranking Democrat on the committee, Rep. Jamie Raskin (D-Md.). "This size means that collectively, you control nearly 80% of prescription drugs dispensed in the country."
CVS Caremark President David Joyner countered that some 70 companies offer PBM services and that companies like his succeed because they do the job of bringing down costs well.
"This is a highly competitive marketplace," Joyner said. "We basically win and lose based off the value proposition that we present to our customers."
All the executives touted their efforts to support local pharmacies.
"We have over 26,000 independent local pharmacies in our network," Optum Rx CEO Dr. Patrick Conway said. "The reimbursement rate, that volume of prescriptions has gone up over time. The number of pharmacies have gone up over time."
The executives also repeatedly passed blame for the high cost of drugs to manufacturers, which they said have sole pricing power. PBMs reduce prices for health plans and employers, they said.
"When drug manufacturers want to charge them too much, we're there to rein them in," said Joyner.
Several lawmakers expressed outrage at step therapy requirements, under which patients must first try a cheaper medication.
Rep. Buddy Carter (R-Ga.), displaying a photo of an ill child in his district, called the practices "despicable" and blamed them for the child's hospitalization.
"Step therapy is not just ruining people's lives, it is killing them," said Rep. Ayanna Pressley (D-Mass.), citing another case of an ill child. "Are you sorry?"
No, Joyner said, arguing that his company and others have a responsibility to ensure the proper medications are prescribed, not the most expensive ones.
"I think it's an important part of the healthcare system," Joyner said. "Our customers hold us accountable and look to make sure we have oversight."
And while the companies asserted they were transparent, lawmakers criticized them repeatedly for the opposite. Many of the lawmakers argued the PBMs employ complicated structures to make money and tried to illustrate their points by asking how much the executives and their companies made.
Conway said his compensation was about $4 million. Joyner and Express Scripts President Adam Kautzner both declined to give a public answer.
Rep. Rashida Tlaib (D-Mich.) asked all three whether their profits were increasing. Joyner said his company was making money, but profits were down so far this year. Conway said Optum Rx did better in 2023 than 2022, and Kautzner said Cigna's earnings rose in the same period. He did not offer specifics about Express Scripts.
"I don't understand how you're making money and making profit if you're trying to lower costs on our residents. I'm just confused on how you do both," Tlaib said. "You've got to be making money from somewhere."
Not every lawmaker was hostile to the executives. Rep. Eric Burlison (R-Mo.) suggested the companies must be doing something right if employers and plans continue to use them.
"Do you literally put a gun to the head of the businesses that hire you that pay you, Mr. Joyner?" Burlison asked.
"Not at all," Joyner said. "In fact, they hire us to do a very specific job, and as we said earlier, [they have] very high satisfaction."
Most of the legislators, however, were deeply dissatisfied. Some suggested the executives were not being honest. Comer reminded executives they were under oath after they said they do not steer patients to their companies' own pharmacies, in contradiction to the FTC report.
Rep. Russell Fry (R-Ind.) refused to accept Kautzner's statement that independent pharmacists have the power to bargain and "redline" items in contracts with Express Scripts.
"I just find it deeply troubling that I actually don't believe you," Fry said.
Kautzner repeatedly said his firm supports small pharmacies, having added some 1,400 to Express Scripts' network in the past year. Joyner said CVS Caremark works with 27,000 independent pharmacies and pays them more than chain pharmacies.
At stake for the companies is whether Congress passes numerous bills aimed at PBMs. Several have advanced in each chamber of Congress, but none have passed both. They would enhance transparency and place various restrictions on PBMs, including how they can be compensated. Spread pricing and profits from rebates are major focuses.
Many of the bills' sponsors aim to include them — or at least parts of them — in healthcare legislation that must move before the end of the year to keep numerous expiring programs running.
