House oversight panel launches new probe into major PBM tactics

A key House panel is demanding documents and communications from major pharmacy benefit managers CVS Caremark, Express Scripts and OptumRx on what they call anti-competitive tactics such as spread pricing and rebates. 

The probe, announced Wednesday by the House Oversight Committee, is the latest signal Congress is seeking reforms to the PBM industry, as efforts in the Senate seek to improve transparency in the marketplace. 

“Greater transparency in the PBM industry is vital to determine the impact that their tactics are having on patients, the pharmaceutical market and healthcare programs administered by the federal government,” said Rep. James Comer, R-Kentucky, chairman of the oversight committee, in a statement. 

Comer sent letters to CVS Caremark, UnitedHealth Group subsidiary OptumRx and Cigna's Express Scripts with demands to turn over documents and communications surrounding several topics. These include incentives to steer patients to a pharmacy owned by the PBM instead of an independent facility and a list of all rebates paid by manufacturers and wholesalers. 

“PBMs engage in self-benefiting practices at multiple levels of the payment and supply chain as they retain control over drug prices, rebates, pharmacy reimbursements, insurers, pharmacy networks, and formularies,” wrote Comer in the letter to Express Scripts (PDF). 

The letters detailed several polices that it believes are anti-competitive, including “fail-first” policies that will require a patient to fail on the PBM’s preferred drug before taking the one originally prescribed by the provider. 

Independent pharmacies have long complained about PBM tactics such as spread pricing, which pays facilities a lower amount than they charge to a plan sponsor. Pharmacies have also decried direct and indirect remuneration (DIR) fees, where a PBM claws back payments to the facility after the drug has been dispensed. 

Comer wrote in a release that the panel reached out to the three PBMs because they make up an estimated 80% of the market.

The letters are the latest probe by Congress into PBMs, a sign lawmakers could act this session on the industry.

The Senate Commerce Committee held a hearing last month that questioned several PBM tactics, including steering patients toward affiliated pharmacies. Legislation co-sponsored by Sens. Chuck Grassley, R-Iowa, and Maria Cantwell, D-Washington, would ban spread pricing and clawback DIR fees. A separate bill also calls for the Federal Trade Commission (FTC) to probe the industry and issue recommendations.

The FTC has already launched a probe into the industry’s business practices and has subpoenaed the six largest PBMs in the country.  

PBM industry group Pharmaceutical Care Management Association (PCMA) slammed the letters as a distraction against going after prescription drug manufacturers. 

“Increasing competition in the prescription drug market is the most effective way to lower costs—and is achievable if lawmakers hold big drug companies accountable for common and egregious abuses of the drug patent system,” said PCMA CEO JC Scott in a statement.