In case anyone was wondering, it’s never good to be identified as a “middleman.” That’s the label being applied to pharmacy benefits managers who are being blamed for jacking up pharmaceutical prices through opaque agreements with pharmaceutical manufacturers and insurers, which allow the PBMs to negotiate substantial discounts without passing the savings along to consumers. The problem has reached crisis proportions, prompting America’s Congress to open an investigation by legislators.
- Senator Chuck Grassley (R, Iowa), the chairman of the Senate Finance Committee, writes that a series of successful legislative efforts and self-regulatory efforts by other parts of the healthcare supply chain have already produced considerable transparency around their role in determining drug prices, fostering competition and leading to lower prices. For example, drug companies publish lists of price increases and pharmacies participate in electronic databases that allow consumers to search for the lowest prices near them. Pharma and medical device companies also have to report any payments made to doctors and hospitals that might affect prescribing decisions.
- Grassley notes that legislators and regulators have also taken aim at direct-to-consumer advertising, a favored tactic of pharma companies which however has been blamed for higher drug prices, as it prompts consumers to ask for name brands rather than generics and (it is alleged) potentially seek more expensive medications they don’t need.
- Now it’s the pharmacy benefits managers’ turn, Grassley warns in his op-ed for Fox News: “I intend to press the PBMs on what can be done to shed light on their activities. I will also address whether the PBMs are acting in the best interests of Medicare and Medicaid beneficiaries as well as the American taxpayer. Because if they’re not, we need to fix that. I look forward to the hearing and I look forward to introducing more legislation to address the problem of high prescription drug prices.”
