Last week was a busy one for community pharmacy, with multiple hearings on the cost of health care in the House Budget Committee, House Energy and Commerce Committee's Subcommittee on Health, and House Committee on Ways and Means. The Budget Committee hearing on Wednesday, Jan. 21, focused largely on federal spending and the Affordable Care Act but featured some comments on PBMs. The next day, the other two committees grilled the CEOs of five major health insurance companies on their role in the rising cost of care, including many questions and comments on the role of PBMs in those skyrocketing costs.
During the House Budget Committee hearing, "Reverse the Curse: Skyrocketing Health Care Costs and America's Fiscal Future," Chair Jodey Arrington (R-Texas) mentioned PBMs as one of several areas of potential cost savings (in addition to hospital reforms), and highlighted the votes this week on PBM provisions, saying, "we need to do more there. We need to be more aggressive." Later in the hearing, Rep. Chip Roy (R-Texas) pointed out that 80 percent of prescriptions are processed by the Big Three PBMs, and called consolidation in health care "a massive problem."
In the health subcommittee hearing, "Lowering Health Care Costs for All Americans: An Examination of Health Insurance Affordability," multiple members mentioned the role of insurance company PBMs in their questioning, including subcommittee Chairman Morgan Griffith (R-Va.), Energy and Commerce Chairman Brett Guthrie (R-Ky.), and Reps. Buddy Carter (R-Ga.), Diana Harshbarger (R-Tenn.), Alexandria Ocasio-Cortez (D-N.Y.), Jake Auchincloss (D-Mass.), Erin Houchin (R-Ind.), and Dan Crenshaw (R-Texas). Several members stood out specifically in their condemnation of insurance consolidation, including Rep. John Joyce (R-Pa.), who is also a dermatologist.
"The companies that you lead today are not just involved in insurance, you own PBMs, you own specialty pharmacies, you own retail pharmacies, you own GPOs, you own physician groups and practices. In some cases, you own hospitals, and you own drug manufacturing companies," Joyce said, adding that he would like the CEOs to provide a written comparison of total cost and spend for routine dispensing fees when their company pays an in-network community pharmacy versus a pharmacy that they own.
Rep. Mariannette Miller-Meeks (R-Iowa) focused on PBM group purchasing organizations (GPOs), using a chart to show the role of these new, relatively shadowy subsidiaries. Miller-Meeks said, "The health plans are told 100 percent of the rebates negotiated by its PBM are then returned to the plan as savings. They often aren't told anything about the PBM GPO subsidiaries, which collect a whole different set of fees from the drug maker in exchange for formulary management.
"So, a health plan might be getting 100 percent of the rebates the PBM received, but the plan has no idea if the rebate got everything the GPO earned, or how much money the GPO may have kept," she said. "It begs the question, are PBM GPOs just a cover for the big three to say in a contract that they pass through 100 percent of the rebates they get, and also a way to keep anyone else from being able to fully access brand drugs?"
Closing out a very active day in congressional committees, the House Committee on Ways and Means held their own hearing with the same insurance CEOs on the rising cost of care and premiums. Members focused more on premiums in that hearing, but Chairman Jason Smith (R-Mo.) and Rep. Darin Lahood (R-Ill.) talked extensively about consolidation and vertical integration. Rep. Greg Murphy (R-N.C.) carried on the theme of consolidation in perhaps the standout line of questioning in the hearing, starting off with a personal account of his recent brain surgery and personal struggles with insurance coverage, noting that he experienced eight denials trying to get the medication he needed from CVS.
"I have been a physician for 35 years, and sadly, have had a front seat to witness the decay and decline of America's largest industries, and that's the health insurance industry. I have had patients cry in my room. I have had physicians cry to me, throw up their hands in disgust, and quit because of the actions of our health insurance industry. Nothing you're going to say to me today is going to change that you have put profits above patients, and you put profits above those who care for patients," Murphy said. "Vertical integration — you guys own PBMs, you own pharmacies, you own health agencies, physician groups, good God — you own a bank. Why would an insurance company own a bank?"
"The vertical integration has destroyed competition in this country, and if I had my way, I'd turn all of you guys into dust. We'd start from scratch," he concluded.
You can listen to the whole hearings from House Budget here, House Energy and Commerce here, and House Ways and Means here.
