Pharma companies, PBMs play blame game over drug prices at hearing

Pharmaceutical companies and pharmacy benefit managers once again pointed the finger at one another in a hearing Thursday on lowering drug prices. 

The House Energy and Commerce Committee’s Subcommittee on Health hosted representatives from PBMs, drug companies and providers to “deconstruct” the pharmaceutical supply chain and discuss ways to bring down prices. 

At the center of the debate: the role rebates negotiated by PBMs play in pricing and the lack of transparency around the system. 

Amy Bricker, senior vice president for supply chain at Express Scripts, said in her testimony (PDF) that drug companies have chosen the rebate system over lowering list prices. 

“The problem starts with list prices, not rebates,” Bricker said, “but we owe it to our fellow Americans to find solutions.” 

RELATED: Industry Voices—Why it’s time for PBM rebates to come to an end 

Meanwhile, drug companies argued in favor of ending the practice, saying that passing rebates directly to consumers would allow them to save significant amounts of money at the pharmacy counter.  

Justin McCarthy, senior vice president of the patient and impact group at Pfizer, said in his testimony (PDF) that a third of Medicare Part D prescriptions are “abandoned” by seniors at the pharmacy when they’re asked to pay $250 or more. 

“Contrary to what some analysis has said, the rebate rule is not a windfall to Pfizer or the pharmaceutical industry,” McCarthy said. Without rebates, PBMs will have the ability to negotiate greater discounts. 

The hearing was a microcosm of the broader debate around drug pricing and rebates, which has pitted pharmaceutical companies and PBMs against one another to deflect blame on who’s responsible for rising costs. 

RELATED: Azar says HHS is still committed to addressing PBM rebates 

PBMs and drug companies have each testified separately on panels before the Senate Finance Committee, and each blamed the other. Drug companies argue that PBMs are using the savings from discounts to line their own pockets, while PBMs shoot back that pharma companies can lower their prices and choose not to. 

As the two square off, the federal government is planning to end legal protections for rebates in Part D, forcing PBMs to offer point-of-sale discounts instead. This proposal, which was issued in late January and has yet to be finalized, has been praised by drug companies. 

PBMs instead warn that it would lead to higher premiums and spending in Part D, as plan sponsors typically use the savings from rebates to lower premiums overall. An analysis from the Congressional Budget Office backs up this claim. 

Bricker said it’s crucial for policymakers to consider that relatively few drugs have rebates available—they are not applied to generics, for example—and that extends to the new, and pricey, therapies coming to the market. 

“Too many drugs often without rebates are coming to market with little or no regard for affordability,” she said.