Senate panel asks CVS and four other pharmacy middlemen to testify about drug prices

Senate panel asks CVS and four other pharmacy middlemen to testify about drug prices

The Senate Finance Committee said Tuesday it invited five major pharmacy benefit managers to testify before Congress about high prescription drug costs in the U.S.

Chairman Chuck Grassley, R-Iowa., and Ron Wyden, D-Ore., the committee’s ranking member, asked Cigna, CVS, Humana, OptumRx and Prime Therapeutics to testify on Capitol Hill on April 3. Both senators have been critical of PBMs, sometimes referred to as middlemen, which negotiate drug benefits with manufacturers for insurance plans and employers.

“Middlemen in the health care industry owe patients and taxpayers an explanation of their role. There’s far too much bureaucracy and too little transparency getting in the way of affordable, quality health care,” Grassley and Wyden said in a joint statement Tuesday. “We’ve heard from pharmaceutical companies and it’s only fair that the committee has the opportunity to ask questions of other players in the health care supply chain.”

CNBC has reached out to each company for comment.

High drug costs have become a rare bipartisan issue with lawmakers on both sides of the aisle demanding something be done. President Donald Trump has made lowering prices one of the key issues of his administration. Democrats are jockeying to prove they can lead reform.

Spending on prescription drugs in the U.S. increased to $333.4 billion in 2017, according to the latest data from the Centers for Medicare and Medicaid Services.

The April hearing would mark the committee’s third on drug prices this year. Late last month, the committee heard from executives of AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer and Sanofi.

The pharma executives didn’t talk much about list prices. Instead, they blamed middlemen for pocketing discounts instead of passing them along to patients. They suggested changes to Medicare, including capping the amount seniors would pay for on their own at the pharmacy counter every year.

Grassley had hinted last month that the committee’s drug pricing probe wouldn’t end with pharmaceutical companies.

The nation’s four largest PBMs are now all integrated with health insurance firms, following the recent completion of CVS Health’s merger with Aetna and Cigna’s acquisition of Express Scripts. UnitedHealth Group owns the OptumRX PBM and Anthem will be launching its own unit IngenioRx.

Does anyone believe that you can add one or more middlemen to a distribution system.. each with their own cost infrastructure and goal to show a profit and the overall cost of the product will be lower ?

Seemingly everyone points to how countries with a single payer system pays less for medication… could it be because they don’t have layers of middlemen between the pharma/manufacturer and the end pt ?

When I started working in pharmacies – back in the day – the pharmacy/ medication distribution system was pretty simple… there was a pharma/manufacturer, a pharmacy wholesaler(s) and the pharmacy… the pt paid CASH for their prescription at the pharmacy and the pharmacy was able to purchase those Rx medication from a wholesalers and/or in many instances was able to purchase the medication directly from the pharma/manufacturer. NO ONE was negotiating DISCOUNTS… but the average Rx price to the pt was in the $4 -$5 range.

Today the average Rx price is pushing $60 and some believe that all the seen and unseen middlemen can account for upwards of 50% of the final price. So who is benefiting for all these middlemen in our Rx distribution system.

With 4 + Billion Rxs filled every year.. it would appear that all of these seen and unseen middlemen are causing pts and/or insurance companies in paying upwards of 120 BILLION more than would otherwise be necessary without all of those middlemen.  The promise of all these middlemen to “save everyone in the system money” does not seem to be a valid argument or promises of being able to save the system money.

The Insurance industry has one of the top five lobbying “war chests” to lobby Congress… and it is claimed that lobbyists collectively spend NINE million PER DAY – 7 days a week on the 535 members of Congress.  Could it be that all the members of Congress are being “blinded” by all the actions of the lobbyists being funded by the insurance industry. They claim that you can’t BUY A MEMBER OF CONGRESS… but many seem to be on long term “leases”.

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