During a Congressional hearing, US pharmaceutical industry intermediaries defended their roles in the healthcare system. Committee members accused these intermediaries of pushing patients toward expensive treatments despite the availability of lower-cost options. A House Committee on Oversight and Accountability report released earlier that day provided evidence suggesting that pharmacy benefit managers (PBMs) compel drugmakers to pay rebates for placing branded drugs favourably on insurance plan medication lists.
Executives from the top three US drug benefit managers – UnitedHealth’s OptumRx, Cigna’s ExpressScripts, and CVS Health’s Caremark – testified that their business models save health plan members money, including those in labour union plans. They attributed the high costs to “patent abuses” by drug manufacturers, which delay the launch of cheaper generic and biosimilar medicines, and to the high launch prices of new drugs.
PBMs blamed for high drug costs
Pharmaceutical executives have repeatedly blamed PBMs for the high prescription drug costs. CVS Caremark President David Joyner highlighted the issue, stating that a new drug’s median annual price was $300,000 last year. He pointed out that the costs of drugs like Humira, Ozempic, and Stelara surpass the total cost of all generic drugs combined.
Joyner described the price of GLP-1 drugs used for weight loss as “overwhelming,” estimating that costs would exceed $1.2 trillion annually if all obese individuals received them. He noted that Novo’s Ozempic and Wegovy and Eli Lilly’s Mounjaro drove more than two-thirds of the increased costs for Caremark customers in 2023.
Anti-competitive policies
The committee’s chair, James Comer, a Republican, criticised PBMs for deflecting responsibility for drug pricing onto manufacturers. Pharmacy benefit managers handle prescription drug benefits for health insurance companies, large employers, and Medicare prescription drug plans.
According to Representative Jamie Raskin, a Democrat, CVS, UnitedHealth, and Cigna control 80% of prescription drugs dispensed in the US. The committee’s report accused these intermediaries of using their position to enact anti-competitive policies and protect their profits.
It also highlighted that healthcare companies share patient data among business units to steer patients toward their own pharmacies. They have also begun moving operations abroad to avoid transparency and proposed reforms.