Comer: Pharmacy Benefit Managers Deploy Drug Pricing Tactics to Line Their Own Pockets

WASHINGTON – Today, House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) delivered opening remarks at a full committee hearing titled “The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part II: Not What the Doctor Ordered.”In his opening statement, Chairman Comer noted that this is the committee’s second hearing on PBMs and emphasized that their tactics are causing Americans to suffer from rising health care premiums and expensive prescription drug prices. He described how these deliberate, anticompetitive pricing tactics aim to prevent payers—including government payers like Medicare, Medicaid, Tricare, and the Federal Employee Health Benefits program—from understanding how PBMs are making billions at the expense of patients and taxpayers. Three large PBMs have now monopolized the pharmaceutical market and engage in these self-benefitting practices that boost their bottom line without a benefit to patients. He stressed that greater transparency and accountability is needed in the PBM industry. In addition to the PBM Committee report released in 2021, Chairman Comer concluded that the Committee will continue to press forward to shine a light on PBMs undermining health practices and work to inform legislative solutions.    

Below are Chairman Comer’s remarks as prepared for delivery.

I want to welcome everyone to today’s hearing on the role of Pharmacy Benefit Managers in Pharmaceutical Markets.

This is the second hearing in our series discussing pharmacy benefit managers, or PBMs, and their role in the pharmaceutical market.

Last Congress, Oversight Republicans conducted a review of PBMs. 

What we found was deeply concerning and raised many questions about PBMs’ role in the healthcare industry.

PBMs started out as beneficial additions to the healthcare system because they were competing with each other to provide clarity to pharmacies, payers, and patients about drug costs.

But that environment of competition and transparency is no longer true today.

Instead of fierce competition, now just three PBMs control 80 percent of the market.

And each of the three major PBMs—CVS Caremark, Express Scripts, and Optum Rx—is owned by a major health insurer and owns, or is owned, by a pharmacy.

This means that when PBMs negotiate with a pharmacy or a health insurer, they are either negotiating with themselves or one of their direct competitors.

This can create incentives to do things that have negative impacts on patients.

That is why the Committee’s examination of PBMs is a priority this Congress.

Our concerns were compounded by what we learned in our first PBM hearing, held earlier this year in the spring. 

We heard from Greg Baker, a pharmacist in Jacksonville, Florida, who discussed how he is unable to serve Tricare beneficiaries in his community. 

This is because Express Scripts is forcing Tricare beneficiaries to use specific pharmacies on military bases.

We heard from Dr. Miriam Atkins, an oncologist in Georgia, who discussed how PBMs—not doctors—can dictate which drugs a patient can use.

They do this through tactics that require a patient to fail on a certain drug before trying another drug, and by requiring the use of mail order pharmacies, which can be unreliable and wasteful.

We also heard from Greg Baker, the CEO of AffirmedRx, a transparent PBM that works to provide clear pharmacy benefit services to employers. 

He discussed how typical PBM practices could be considered price gouging and gave examples of a cancer drug, Imatinib, and the difference in price for a 30-day supply of Imatinib at Cost Plus Drugs versus CVS.

That difference is astounding.

A 30-day supply at Cost Plus Drugs costs $72. 

That very same 30-day supply at CVS costs more than $17,000.

Those two prices are for the exact same prescription. 

It begs the question, why is one prescription so much more expensive? And what is happening with that extra money?

We know that PBMs regularly engage in spread pricing, where PBMs overcharge payers and underpay pharmacies, and pocket the extra money.

We also know that drug manufacturers pay rebates to PBMs in order to be placed in a favorable tier on a formulary, which can make it difficult for competing prescriptions—often generics or biosimilars—to get on formularies.

These practices have real world consequences, and impact constituents in all our districts.

I hope today’s hearing provides more clarity into the pharmaceutical market so that Congress can determine what actions are necessary.

I thank the witnesses, and now yield 5 minutes to Ranking Member Raskin for his opening statement.

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