Oversight Democrats Probe Three Largest PBMs for Driving Up Costs of Lifesaving Prescriptions

Washington, D.C. (July 24, 2024)—Rep. Jamie Raskin, Ranking Member of the Committee on Oversight and Accountability, led Committee Democrats in examining anticompetitive industry policies that increase prescription drug costs, hurt local pharmacies, and hinder patient care in a hearing with the nation’s three largest Pharmacy Benefit Managers (PBMs)—Express Scripts, CVS Caremark, and OptumRx.

“Although PBMs operate way outside of public consciousness, your companies have immense power over patients,” said Ranking Member Raskin in his opening remarks.  “Even if this system works for some patients, it's clear that many served by your companies are falling through the cracks—whether they experience delays in getting the medicine they need or are forced to overpay.  In a for-profit health care system, we know companies will seek profits.  But it is unacceptable for those profits to come at the expense of patients getting the basic medicine they need to lead their full and healthy lives.” 

The hearing included testimony from Adam Kautzner, President of Express Scripts; David Joyner; President of CVS Caremark; and Patrick Conway, CEO of OptumRx. 

Committee Democrats explained how consolidation and lack of transparency in the PBM industry incentivize PBMs to put profits over patients.

• Rep. Shontel Brown highlighted: “Over 270 million Americans have their drug prices in some way controlled or affected by these three companies sitting before us today.  And yet, these companies have failed to communicate as to how they are working to lower the costs of prescription drugs, pass along savings to patients, and protect local and independent pharmacies.  Members of Congress from both parties have expressed concerns about PBMs dictating requirements to local, independent, and small pharmacies, compelling them into your networks and to accept the terms or be excluded from this crucial market.  Unfortunately, many pharmacies cite untenable contract terms from PBMs as part of the reason they must close.  Experts project nearly one third of all independent pharmacies will be forced to close by the end of this calendar year, and approximately 2,200 retail pharmacies closed their doors in the last four years, many of which are in low-income or rural parts of the country where access is already a major issue.” 
   
• Ranking Member Jamie Raskin pointed out: “People don’t choose their PBMs.  People do choose a health insurance plan which in turn has a PBM.  Most people are offered a choice between a small number of health insurance plans and then they wade through somewhat confusing language and murky distinctions to find the one that they think is best suited to the needs of their family.  Nobody is thinking about the PBM that accompanies the health plan they use.  In fact, most people don’t even know that the health plan they’re selecting is going to be working with a PBM.  No one is considering that the health insurance plan they just spent hours try to select is closely affected not just by the insurance company, but also by another enormous business looking to profit.” 
   
• Rep. Summer Lee explained:  “Whether it’s a hospital system, a health insurance conglomerate, or both combined, the consequences of health care monopoly are always the same:  higher costs, reduced access, and worsened health outcomes. And with health insurance companies like UnitedHealth, Cigna, and Aetna, it’s evident that through their monopoly power, they’ve been able to rig our health care system to prioritize profits over patient health, capitalizing on each level of the drug supply chain to boost shareholder returns.  Last year, the parent companies for all three PBMs testifying here today were incredibly successful, as evidenced by their windfall profits.” 
   
• Two of the executives refused to reveal their salaries in response to a question from Rep. Maxwell Alejandro Frost. In the face of this obfuscation, Rep. Frost stated, “This is the issue.  It doesn’t matter if you’re Democrat or Republican.  This is a crisis in this country.  People are dying because they can’t afford their medication.  You all are a part of the problem.” 

Committee Democrats detailed how PBM practices claim to create savings in the health care system but often harm patients instead. 

• Rep. Greg Casar asked the PBM executives about the fees that their companies receive from drug companies as part of price negotiations:  “The point is that PBMs are supposed to be reducing drug prices, supposed to be reducing health care costs, but a 2022 study found that the average premium for individual health insurance has gone up $225.  Two in five adults on employer-sponsored insurance are having difficulty affording their medical care.  So if people are paying more money, if the number of fees has nearly doubled here to $7.6 billion, then why aren’t prices coming down?”
   
• Rep. Ayanna Pressley described what she had heard from her constituents, saying:  “My office has met with patients, families, providers, and community pharmacists throughout my district.  From East Boston to Cambridge to Roxbury, and they all point to one conclusion.  You are putting profits over people.  Your corporations are denying people access to necessary medications, preventing them from going elsewhere by forcing independent pharmacies to close their doors.  And that is why I am glad we’re having today’s hearing to shine a bright light on your unethical practices and I look forward to working with Congress to rein in PBMs.”
   
• Rep. Melanie Stansbury emphasized:  “We shouldn’t have to have hearings like the hearing we’re having here today.  It should not be so complicated that one of our grandparents can’t afford to get the lifesaving medication that will keep them alive and healthy for the coming years.  And it shouldn’t have to come to the reality that we have private for-profit companies that have figured out how to game the system so that they can generate profits while providing some sort of service for their clients at the expense of their communities.”
   
• Rep. Frost highlighted an example of PBMs over-charging health plans for medications, and how that can impact patients:  “When PBMs aren’t doing dirty deals and they do suggest generic drugs to health care plans, they’ve been known to charge massive mark-ups.  One example, Mr. Joyner, your PBM charged some health care plans $138,000 a year for a generic cancer drug that actually has a wholesale cost of just $14,000 a year according to a recent New York Times article.  That’s an 885% increase in price.  Mr. Joyner, the cost of that greed is passed directly onto ordinary people.”