As a key Senate panel weighs several bills targeting drug prices, the finger-pointing between pharmaceutical manufacturers and pharmacy benefit managers over who is to blame for these costs continues.
The Senate Health, Education, Labor and Pensions (HELP) Committee convened the heads of three big pharmas—Eli Lilly CEO David Ricks, Novo Nordisk CEO Lars Fruergaard Jørgensen and Sanofi CEO Paul Hudson—as well as the top brass at the three largest PBMs—CVS Health Executive Vice President and President of Pharmacy Services David Joyner, Express Scripts President Adam Kautzner and OptumRx CEO Heather Cianfrocco.
The legislation on the docket for the HELP Committee aims to inject transparency into the pharmaceutical supply chain as well as increase access to generics. PBM reforms on the table include eliminating spread pricing models as well as clawbacks from pharmacies.
Sen. Bob Casey, D-Pennsylvania, said that the rising cost of drugs is an issue that senators from both sides of the aisle hear about constantly from constituents when they return home.
"It's for a lot of families like a heavy bag of rocks around their necks," Casey said.
That said, those hoping for a more productive discussion would be disappointed by the hearing as it boiled down to more of the "he said, she said" conversation that has dominated this space for years. Drugmakers have long argued that PBM negotiation tactics like rebates require list prices to remain high in the name of profitability, while PBMs counter that pharmas have the ability to lower list prices and choose not to.
Cianfrocco, for instance, said OptumRx's insurer and employer clients count on the PBM to serve as a "counterweight" to the drug manufacturers in the system. The pharma execs, meanwhile, all argued that they have brought lower-cost drugs to market that the PBMs refuse to place on their formularies, thus ensuring coverage.
The committee members pushed companies at both sides of the debate on some of the more controversial aspects of their business. Several pressed the PBM executives on their position in huge, vertically integrated organizations.
CVS owns its Caremark PBM as well as a huge retail pharmacy segment and the health plan Aetna. OptumRx is a subsidiary of UnitedHealth Group alongside insurance giant UnitedHealthcare and the growing provider business Optum Health. Express Scripts is a subsidiary of Cigna, as is MDLive, a telehealth provider.
Multiple senators also noted that CVS and UnitedHealth Group land in the top five of the Fortune 500.
Sen. Markwayne Mullin, R-Oklahoma, likened the close relationship between major PBMs and health plans to the "fox guarding the hen house."
"That is just, wow, a great business model," he said.
For the drug companies, there's the fact that American patients pay far more than those living in other countries. Sen. Mike Braun, R-Indiana, warned that this practice could lead to greater regulation, perhaps even to the drug industry becoming a utility like electricity and water.
Committee Chairman Bernie Sanders, I-Vermont, recounted a trip he took from Detroit across the border to Canada to allow patients to purchase insulin at a far lower cost than they would pay stateside.
"I will never forget as long as I live the tears coming out of a mother’s eyes because she can now afford insulin," he said.
The HELP Committee will convene Thursday to mark up four bills that target drug pricing. Sanders said that while these measures are a priority, there's more work to be done in addressing this issue. He added that issues with affording drugs are a broader part of the ongoing challenges around affordability in healthcare.
"We clearly need revolutionary changes in the way we do prescription drugs in this country," Sanders said.