Senators confront Azar on drug pricing comments after PBMs refute his testimony

Sen. Elizabeth Warren, D-Mass., suggested HHS Secretary Alex Azar may be siding with Big Pharma in the blame game over high drug prices. (Edward Kimmel/CC BY-SA 2.0)

Two senators have called on Trump’s top health official to explain testimony indicating pharmacy benefit managers (PBMs) have blocked voluntary price cuts from drug manufacturers.

In a letter to Department of Health and Human Services Secretary Alex Azar, Sens. Elizabeth Warren, D-Mass., and Tina Smith, D-Minn., questioned the accuracy of Azar’s testimony in which he said PBMs threatened to take drugs off their formulary if manufacturers lowered the price.

RELATED: Senators press PBMs to clarify Azar's ‘extremely disturbing' drug pricing allegations

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Warren and Smith subsequently wrote to nine PBMs and drug distributors requesting they respond to Azar’s “extremely disturbing allegations.” All nine companies denied Azar’s claims.

“The information they provided raises serious questions about both of the allegations you made in your testimony, and about whether you were providing accurate and complete information when you indicated that PBMs and drug distributors—rather than drug manufacturers—were responsible for the drug manufacturers’ refusal to reduce drug prices,” they wrote (PDF).

Warren and Smith also suggested that Azar’s previous career with Eli Lilly may have influenced his comments, noting that drugmakers have sought to shift the blame of high costs to PBMs.

"If you have coordinated with the pharmaceutical industry to concoct a scenario in which the drug company failure to reduce prices is blamed on industry middleman rather than attributed to the drug companies themselves, it would raise very serious questions about your commitment to enhancing and protecting the health and wellbeing of all Americans.”

Pharmaceutical companies and PBMs have repeatedly blamed one another for the high cost of drugs. Both sides have also absorbed a fair share of criticism from lawmakers, researchers and policy experts, particularly given the largely secretive process of drug rebates. It was only last week that CVS and Express Scripts disclosed how much they make on rebates for commercial plans.

RELATED: Azar blames PBMs for ‘broken system’ in Senate Finance hearing dominated by immigration debate

In their responses (PDF) to the senators last month, PBMs, including CVS Health, Express Scripts, OptumRx and Humana flatly denied that they prevented pharmaceutical companies from voluntarily reducing drug prices. While CVS acknowledged Pfizer’s commitment to roll back previous price increases, the remaining PBMs said they have not received any commitments for lower list prices.

“Our reaction to drug makers has consistently been that we welcome lower list prices and lower list prices would not harm formulary status or patient access,” Express Scripts Vice President of Corporate Government Affairs Jonah Houts wrote in response.

Blue Cross Blue Shield's PBM Prime Therapeutics said it has received one call from a manufacturer "conducting very preliminary market research" about the impact of pricing changes. 

"This is the only call we have received that is even tangentially related to the Trump Administration drug pricing initiative," CEO James DuCharme wrote. 

Warren and Smith requested Azar respond to questions by Aug. 31 detailing specific interactions with drugmakers that wanted to lower list prices and evidence that PBMs are creating hurdles for drugmakers to decrease drug prices. 

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