[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                     THE ROLE OF PHARMACY BENEFITS
                     MANAGERS IN PRESCRIPTION DRUG
                           MARKETS PART III:
                    TRANSPARENCY AND ACCOUNTABILITY

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      OVERSIGHT AND ACCOUNTABILITY
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION
                               __________

                             JULY 23, 2024
                               __________

                           Serial No. 118-123
                               __________

  Printed for the use of the Committee on Oversight and Accountability
  
  
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                       Available on: govinfo.gov,
                         oversight.house.gov or
                             docs.house.gov
                             
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
56-324 PDF                 WASHINGTON : 2024                                


               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                    JAMES COMER, Kentucky, Chairman

Jim Jordan, Ohio                     Jamie Raskin, Maryland, Ranking 
Mike Turner, Ohio                        Minority Member
Paul Gosar, Arizona                  Eleanor Holmes Norton, District of 
Virginia Foxx, North Carolina            Columbia
Glenn Grothman, Wisconsin            Stephen F. Lynch, Massachusetts
Michael Cloud, Texas                 Gerald E. Connolly, Virginia
Gary Palmer, Alabama                 Raja Krishnamoorthi, Illinois
Clay Higgins, Louisiana              Ro Khanna, California
Pete Sessions, Texas                 Kweisi Mfume, Maryland
Andy Biggs, Arizona                  Alexandria Ocasio-Cortez, New York
Nancy Mace, South Carolina           Katie Porter, California
Jake LaTurner, Kansas                Cori Bush, Missouri
Pat Fallon, Texas                    Shontel Brown, Ohio
Byron Donalds, Florida               Melanie Stansbury, New Mexico
Scott Perry, Pennsylvania            Robert Garcia, California
William Timmons, South Carolina      Maxwell Frost, Florida
Tim Burchett, Tennessee              Summer Lee, Pennsylvania
Marjorie Taylor Greene, Georgia      Greg Casar, Texas
Lisa McClain, Michigan               Jasmine Crockett, Texas
Lauren Boebert, Colorado             Dan Goldman, New York
Russell Fry, South Carolina          Jared Moskowitz, Florida
Anna Paulina Luna, Florida           Rashida Tlaib, Michigan
Nick Langworthy, New York            Ayanna Pressley, Massachusetts
Eric Burlison, Missouri
Mike Waltz, Florida

                                 ------                                
                       Mark Marin, Staff Director
       Jessica Donlon, Deputy Staff Director and General Counsel
          Daniel Ashworth, Deputy Chief Counsel for Oversight
              Reagan Dye, Senior Professional Staff Member
                Sarah Feeney, Professional Staff Member
        Ellie McGowan, Staff Assistant and Administrative Clerk

                      Contact Number: 202-225-5074

                  Julie Tagen, Minority Staff Director
                      Contact Number: 202-225-5051

                                 ------                                
                         C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on July 23, 2024....................................     1

                               WITNESSES

                              ----------                              

David Joyner, President, CVS Caremark, Executive Vice President, 
  CVS Health
Oral Statement...................................................     5

Adam Kautzner, PharmD, President, Express Scripts and Evernorth 
  Care Management
Oral Statement...................................................     6

Patrick Conway, MD, MSc, CEO, Optum Rx
Oral Statement...................................................     8

 Opening statements and the prepared statements for the witnesses 
  are available in the U.S. House of Representatives Repository 
  at: docs.house.gov.

                           INDEX OF DOCUMENTS

                              ----------                              

  * Report, Economic Analysis on PBM Criticisms - Compass 
  Lexecon; submitted by Rep. Burlison.

  * Letter, May 27, 2024, Beth Waldron; submitted by Chairman 
  Comer.

  * Letter, July 23, 2024; from DLC and DPAC; submitted by 
  Chairman Comer.

  * Letter, July 22, 2024; submitted by Chairman Comer.

  * Settlement Agreement, CVS-OAG Fully Executed Redacted; 
  submitted by Chairman Comer.

  * Statement, July 22, 2024, ASHP on PBMs in Prescription Drug 
  Markets; submitted by Chairman Comer.
  * Statement, May 31, 2024, CF Foundation; submitted by Chairman 
  Comer.

  * Article, The New York Times, ``How Chaos at Chain Pharmacies 
  Is Putting Patients at Risk''; submitted by Rep. Biggs.

  * Article, Drug Topics.com, ``Independent Pharmacies Continue 
  to Face Financial Hardships as the Clock Ticks on PBM Reform''; 
  submitted by Rep. Biggs.

  * Article, ASHP.org, ``Mail-order Medications Often Exposed to 
  Unsafe Temperatures''; submitted by Rep. Biggs.

  * Article, The American Prospect, ``Prescription Drug Middleman 
  Potentially Profiting off Veterans''; submitted by Rep. Biggs.

  * Article, Daily Mail, ``Rite Aid, CVS and Walgreens will shut 
  more than 1,500 stores''; submitted by Rep. Biggs.

The documents listed are available at: docs.house.gov.
                           INDEX OF DOCUMENTS

  * Article, The Wallstreet Journal, ``The 90-Day Prescription 
  Isn't for Everyone''; submitted by Rep. Biggs.

  * Article, US Pharmacist.com, ``TRICARE Removed 15,000 
  Independent Pharmacies From Network''; submitted by Rep. Biggs.

  * Letter, July 17, 2024, from 60 Plus PBM; submitted by 
  Chairman Comer.

  * Letter, May 30, 2024, from the Association of Accessible 
  Medicines; submitted by Chairman Comer.

  * Letter, June 14, 2024; from NACDS and NCPA; submitted by 
  Chairman Comer.

  * Letter, July 23, 2024, from NAM; submitted by Chairman Comer.
  * Letter, July 19, 2024, from PBM Accountability Project; 
  submitted by Chairman Comer.

  * Letter, July 22, 2024, from the Pharmacy Coalition; submitted 
  by Chairman Comer.

  * Report, 2021 Committee PBM Report; submitted by Chairman 
  Comer.

  * Report, APCI, Insights Issue 001; submitted by Chairman 
  Comer.

  * Report, FTC, Interim Staff Report on PBM; submitted by 
  Chairman Comer.

  * Report, PBM FINAL with Redactions; submitted by Chairman 
  Comer.
  * Ruling, July 15, 2024, NYCBS NY District Court; submitted by 
  Chairman Comer.

  * Statement, July 23, 2024, NACDS; submitted by Chairman Comer.

  * Statement, July 23, 2024, Patients Rising; submitted by 
  Chairman Comer.

  * Ruling, July 15, 2024, Memorandum and Order filed; submitted 
  by Rep. Langworthy.

  * Letter, December 8, 2023, from AFSCME; submitted by Rep. 
  Mfume.

  * Letter, May 31, 2024, CF Foundation, submitted by Rep. Mfume.

  * Letter, July 22, 2024, from Pharmacy Coalition; submitted by 
  Rep. Mfume.

  * Article, KFF Health News, ``Save Billions or Stick With 
  Humira''; submitted by Rep. Porter.

  * Letter, July 23, 2024, from Pharmacist Bryan Homberg; 
  submitted by Rep. Tlaib.

  * Letter, July 23, 2024, from Pharmacist Jordan Marchetti; 
  submitted by Rep. Tlaib.

 
                     THE ROLE OF PHARMACY BENEFITS
                     MANAGERS IN PRESCRIPTION DRUG
                           MARKETS PART III:
                    TRANSPARENCY AND ACCOUNTABILITY

                              ----------                              


                         Tuesday, July 23, 2024

                     U.S. House of Representatives

               Committee on Oversight and Accountability

                                           Washington, D.C.

    The Committee met, pursuant to notice, at 10 a.m., in room 
2154, Rayburn House Office Building, Hon. James Comer [Chairman 
of the Committee] presiding.
    Present: Representatives Comer, Gosar, Foxx, Grothman, 
Palmer, Sessions, Biggs, Fallon, Donalds, Timmons, McClain, 
Fry, Langworthy, Burlison, Raskin, Norton, Lynch, Connolly, 
Krishnamoorthi, Khanna, Mfume, Porter, Brown, Stansbury, Frost, 
Lee, Casar, Tlaib, and Pressley.
    Also present: Representatives Harshbarger, Miller-Meeks, 
Carter, Maloy, and Auchincloss.
    Chairman Comer. This hearing of the Oversight and 
Accountability Committee will come to order. I want to welcome 
everyone here today.
    Without objection, the Chair may declare a recess at any 
time, and I want to add that we will be recessing. We hope to 
get all the opening statements in. The House is unfortunately 
called to vote this morning, supposed to be somewhere around 
10:30. But we will attempt to get mine and the Ranking Member's 
opening statements in as well as the opening statements of our 
witnesses, then we will hopefully take the recess, we will have 
votes, and then we will reconvene the hearing and begin with 
the questions.
    I now recognize myself for the purpose of making an opening 
statement. But first, without objection, Representatives Buddy 
Carter of Georgia, Diana Harshbarger of Tennessee, Celeste 
Maloy of Utah, Mariannette Miller-Meeks of Iowa, and Jake 
Auchincloss of Massachusetts are waived on the Committee for 
the purpose of questioning today's witnesses.
    Without objection, so ordered.
    I want to welcome everyone to today's hearing on the role 
of pharmacy benefit managers in pharmaceutical markets. This is 
the third in a series of hearings discussing pharmacy benefit 
managers, or PBMs, and their role in the pharmaceutical market. 
At our first hearing, we heard from practitioners who interact 
with PBMs daily and a transparent PBM executive. They shared 
how PBMs affect their ability to help patients and can 
negatively impact patients' health. Dr. Miriam Atkins, an 
oncologist in Georgia, discussed how PBMs dictate which drugs a 
patient can use and require the use of mail-order pharmacies. 
Kevin Duane, an independent pharmacist in Jacksonville, 
Florida, explained that he is no longer able to serve Tricare 
beneficiaries because Express Scripts forces Tricare 
beneficiaries to use specific pharmacies on military bases. As 
a result, hundreds of thousands of uniformed service members 
and their families have less access to prescription 
medications. Greg Baker, the CEO of a transparent PBM, 
discussed the importance of PBM reform in reducing the costs of 
prescription drugs.
    At our second hearing, we heard from several stakeholders, 
including the National Community Pharmacists Association, the 
Pharmaceutical Research and Manufacturers of America, the 
Association for Accessible Medicine, and the Pharmaceutical 
Care Management Association. These witnesses provided testimony 
that the largest PBMs use spread pricing and abusive rebating 
practices, making it more difficult for generics, biosimilars, 
and other competitors to gain market share. We heard that the 
largest PBMs under reimburse competing pharmacies while 
overcharging payers and pocketing the difference. We learned 
that the largest PBMs steer patients to the pharmacies they own 
while often charging payers more and providing less care.
    Now this Committee has the opportunity today to hear from 
the CEOs of the three largest PBMs: CVS Caremark, Express 
Scripts, and Optum Rx. In March of last year, I sent letters to 
CVS Caremark, Express Scripts, and Optum Rx requesting 
information about each business. Since then, we have received 
more than 140,000 pages of documents from the three largest 
PBMs, including details about their formularies, rebates, 
pharmacy networks, and contracts. In reviewing these documents, 
we have learned the three largest PBMs have used their position 
as middlemen and integration with health insurers, pharmacies, 
providers, and, recently, manufacturers, to enact 
anticompetitive policies and protect their bottom line. The 
largest PBMs share patient information and data across their 
many integrated companies for the specific and anticompetitive 
purpose of steering patients to PBM-owned pharmacies.
    These PBMs frequently tout the savings they provide for 
payers and patients through negotiation, drug utilization 
programs, and spread pricing, but evidence indicates that these 
schemes increase costs for patients and payers. The largest 
PBMs force drug manufacturers to pay rebates in exchange for 
the manufacturers' drugs to be placed in a favorable tier on a 
PBM formulary, making it difficult for competing, lower-priced 
prescriptions, often generics or biosimilars, to get on 
formularies.
    As many states and the Federal Government weigh and 
implement PBM reforms, the three largest PBMs have begun 
creating foreign corporate entities and moving certain 
operations abroad to avoid transparency and proposed reforms. 
The largest PBMs' use of tools, such as prior authorizations, 
fail first policies, and formulary manipulations hurts patients 
and result in poorer health outcomes. The anticompetitive 
policies of the largest PBMs have cost taxpayers and reduced 
patient choice.
    Today, the Committee is releasing a staff report outlining 
the results of our investigation into PBM policies. Simply put, 
the Committee's investigation has found that while PBMs' 
position as middlemen should have enabled them to reduce the 
costs of prescription drugs and improve Americans' health 
outcomes, they have not. Instead, the cost of prescription 
drugs has gone up every year for 15 years. Instead, patients 
have less choice and worse health outcomes.
    I ask unanimous consent to enter the Committee staff report 
titled, ``The Role of Pharmacy Benefit Managers in Prescription 
Drug Markets,'' into the record.
    Without objection, so ordered. I encourage everyone to read 
this.
    I am hopeful that today's hearing will provide transparency 
and accountability for how PBMs have impacted the market for 
prescription drugs. I now recognize Ranking Member for his 
opening statement.
    Mr. Raskin. OK. Thank you, Mr. Chairman. Welcome to the 
witnesses. It is the third Committee hearing this Congress on 
the subject, and we finally have the largest PBMs here at the 
table. Thank you for joining us. Patients say that some of your 
practices are making it more difficult and more expensive to 
access the medication that they need, and so we need to hear 
from you about what is going on. The three companies 
represented today account for 80 percent of the PBM market, 
which means that the three of you sitting here are responsible 
for the policies and practices that directly affect the lives 
and the health and the pocketbooks of 270 million people in 
America, most of whom are not even aware that your companies 
exist.
    People do not choose their PBMs. People do choose a health 
insurance plan, which, in turn, has a PBM. Most people are 
offered a choice between a small number of health insurance 
plans, and then they wade through somewhat confusing language 
and murky distinctions to find the one that they think is best 
suited to the needs of their family. Nobody is thinking about 
the PBM that accompanies the health plan they use. In fact, 
most people do not even know that the health plan they are 
selecting is going to be working with a PBM. No one is 
considering the health insurance plan that they spend hours 
trying to select is closely affected not just by the insurance 
company, but also by another enormous business looking to 
profit.
    Although PBMs operate way outside of public consciousness, 
your companies have immense power over patients. PBMs create 
the list of medications that determine what will and will not 
be covered by an insurance plan. They determine how much those 
medications will cost, and they determine which pharmacies a 
patient can or cannot use to access the medications. Your three 
companies are dictating these terms for four out of five people 
in our country, and I am glad you are here with us today to 
provide serious, robust insight into these decisions.
    While we do not have a lot of visibility into the inner 
workings of PBMs, the work this Committee has done on PBMs this 
Congress has provided many examples of how your policies are 
not necessarily always working for the people that are served. 
The New York Times recently reported that one of your companies 
was charging patients on Medicare more than $650 for a 
medication that would have cost less than $50 at an online 
pharmacy without any insurance at all. A different patient was 
reportedly charged $211 by one of your companies for a drug he 
could have acquired at Costco for $22. That is a 10-to-1 ratio 
between what people are paying through the PBMs versus what 
they could get in just an out-of-pocket purchase. Who do these 
policies benefit? Well, obviously not the patients. It seems 
they benefit the PBMs, which gets reimbursed by the health 
insurer for that higher price.
    Even if this system works for some patients, it is clear 
that many served by your companies are falling through the 
cracks, whether they experience delays in getting the medicine 
they need or they are forced to overpay. In a for-profit 
healthcare system, we know companies are going to seek profits, 
but it is unacceptable for those profits to come at the expense 
of patients getting the basic medicine that they need to lead 
their full and healthy lives.
    Democrats on the Committee have long worked to hold Big 
Pharma accountable for the ways in which they relentlessly 
manipulate the price of medications and make them unaffordable 
for tens of millions of Americans. Our 3-year investigation 
revealed that pharmaceuticals use anticompetitive tactics to 
stop generics from entering the market and to target the U.S. 
for high prices because our government simply did not have the 
power to directly negotiate with them the way that our pure 
countries do. But last Congress, Democrats passed the Inflation 
Reduction Act, and the wins from that landmark legislation are 
already being felt. Beginning next year, Medicare will 
negotiate drug pricing directly with the pharmaceuticals, and 
drug companies will now have to reimburse the government when 
they raise prices beyond the rate of inflation.
    But we have a long way to go to place people over profits 
to put healthcare first. I hope that today's hearing can shed 
light on the way that PBMs are taking a page from Big Pharma's 
practices and exacerbating the drug affordability crisis. We 
need a healthcare system that is going to work for the people. 
Thank you, Mr. Chairman. I yield back.
    Chairman Comer. The gentleman yields back. Today we are 
joined by David Joyner. He is the president of CVS Caremark and 
executive vice president of CVS Health. He has worked for more 
than 27 years in the healthcare and PBM industry. Dr. Adam 
Kautzner--did I pronounce that right? I usually do not--I 
apologize--is the president of Express Scripts and Evernorth 
Care Management. He earned his Pharm.D. from the St. Louis 
College of Pharmacy and is a nuclear pharmacist. Dr. Patrick 
Conway is the CEO of Optum Rx. He is a practicing pediatric 
hospitalist, who earned his medical degree from Baylor College 
of Medicine and a Master of Science in clinical epidemiology 
from the University of Pennsylvania. Thank you all for 
appearing here today. I am looking very forward to your 
testimony and questions.
    Pursuant to Committee Rule 9(g), the witnesses will please 
stand and raise their right hand.
    Do you solemnly swear or affirm that the testimony you are 
about to give is the truth, the whole truth, and nothing but 
the truth, so help you God?
    [A chorus of ayes.]
    Chairman Comer. Let the record show that the witnesses 
answered in the affirmative. Thank you all. You may take a 
seat.
    We appreciate you all being here today and look forward to 
your testimony. Let me remind the witnesses that we have read 
your written statements and they will appear in full in the 
hearing. Please limit your oral statements to 5 minutes. As a 
reminder, please press the button on the microphone in front of 
you so that it is on and the Members can hear you. When you 
begin to speak, the light in front of you will turn green, 
after 4 minutes it will turn yellow. When the red light comes 
on, your 5 minutes have expired, and we would ask that you 
please wrap up.
    I now recognize Mr. Joyner for his opening statement.

                       STATEMENT OF DAVID JOYNER

                        EXECUTIVE VICE PRESIDENT

                CVS HEALTH AND PRESIDENT OF CVS CAREMARK

    Mr. Joyner. Thank you, Chairman Comer, Ranking Member 
Raskin, and members of the Committee. I am David Joyner, 
President of CVS Caremark. I am here to provide you with the 
facts about what we do at Caremark: to bring down the cost of 
prescription drugs for millions of Americans.
    We have successfully converted 90 percent of prescriptions 
to generics, driving costs to historic lows. That means our 
patients only pay $8 out of pocket, on average. We did the same 
for brand-name drugs. From 2017 to 2022, our proven tools and 
strategies drove down the net cost of brand-name drugs by 15 
percent. Despite these successes, brand products with little to 
no competition remain the chief source of rising drug costs, 
spurred by their high list prices. Last year, a new-to-market 
drug carried a median annual price of $300,000, and Humira, 
Ozempic, and Stelara alone cost more than every generic drug we 
covered, combined.
    Humira perfectly illustrates the challenge. Thanks to a 
strategy of patent manipulation, AbbVie blocked any 
competition, and it became the single most expensive drug for 
our customers and their members. The good news is that we were 
uniquely positioned to promote the adoption of biosimilars to 
deliver lowest costs at the pharmacy counter and to get these 
drugs to the people who need them. So, in April, we dropped 
Humira from our major formularies, covering only the 
biosimilars. Today, members are paying lower costs, in most 
cases zero dollar out of pocket, and employers, unions, and 
health plans have realized over half a billion dollars in 
savings. That is the impact we are having with just one drug. 
Now, across the more than 70,000 drugs we cover, we are leading 
the industry and our clients by prioritizing products with low 
list prices while maximizing savings for employers.
    And let me be clear. We do not contribute to rising list 
prices, a fact confirmed by multiple, quantitative independent 
studies. Hampering our ability to negotiate lower drug costs 
only benefits the pharmaceutical manufacturers. These drug 
manufacturers who testified on Capitol Hill said they would not 
lower list prices if rebates were eliminated, it would only 
remove an essential tool in our ability to deliver lower cost 
medications, but there is always room for improvement. And I 
returned to CVS Caremark last year to evolve our PBM by 
increasing transparency and accountability. We have made major 
changes that benefit employers, labor unions, public health 
plans, Medicaid and Medicare, and the pharmacies that we work 
with. The way drugs are priced and reimbursed today is not 
transparent enough for patients, pharmacies, or plans.
    That is why we built TrueCost, a transparent, cost-plus 
model, for every drug that we cover. We show our clients how 
much we pay and reimburse for every single drug, for every 
pharmacy in our network. For the more than 27,000 independent 
pharmacies in our network, they will be reimbursed in line with 
the price they pay to acquire each drug and to provide 
additional dispensing and administrative fees to cover their 
services for patients. Independent pharmacies representing 40 
percent of our network are vital to our work. We reimburse them 
at a higher rate than we do CVS-owned pharmacies and as much as 
25 percent higher for generics. We also have a network of 700 
rural pharmacies with even higher reimbursements, 90 of which 
were added in the last year alone.
    Despite our work, danger lies ahead for the American 
healthcare system: the price of GLP-1 drugs. Between 
skyrocketing demand and price hikes, the costs are 
overwhelming. Ozempic, Mounjaro, and Wegovy drove more than 
two-thirds of increased costs for CVS Caremark customers in 
2023. If every adult with obesity received a GLP-1 
prescription, costs would surpass $1.2 trillion annually. That 
is more than America spends annually on all drugs.
    We will continue to do what is best: use the power of 
competition to make these medications available at lower cost 
to the people who need them. It is our job to provide 
affordable access to important, lifesaving medications that 
improve the quality of life for millions of Americans. We 
enable employers, unions, and state health plans to take care 
of their people, and when drug manufacturers want to charge 
them too much, we are there to rein them in. Thank you.
    Chairman Comer. Thank you. I now recognize Dr. Kautzner for 
his opening statement.

                  STATEMENT OF ADAM KAUTZNER, PHARM.D.

                               PRESIDENT

             EXPRESS SCRIPTS AND EVERNORTH CARE MANAGEMENT

    Dr. Kautzner. Chairman Comer, Ranking Member Raskin, and 
members of the Committee, thank you for inviting me to testify 
today. My name is Adam Kautzner. I grew up in rural Missouri 
and began my career as a pharmacist for a regional hospital 
before joining Express Scripts more than 15 years ago. For 
decades, our mission has remained the same: helping employers, 
labor unions, government agencies, and health plans provide 
more affordable, higher-quality prescription benefits to their 
members. These sophisticated purchasers demand value and drive 
innovation from Express Scripts every single day. That mission 
is also very personal to me. In my early 30's, I was diagnosed 
with stage 3 melanoma, which then progressed to stage 4. I am 
here today because of pharmaceutical innovation, and it is why 
I work so hard to lower costs for more people to access the 
drugs they need.
    In 2023, we helped keep average patient costs for a 30-day 
prescription to $15 for those with employer-sponsored plans. 
Alongside our clients, we shield patients from approximately 90 
percent of drug costs in the healthcare system. In fact, 
patients spent less out-of-pocket in 2023 than in 2022, despite 
rising list prices set by manufacturers, because of our work to 
negotiate discounts across the supply chain. Our deep clinical 
expertise helps patients navigate complex care journeys, 
improve medication adherence, and prevent disease progression 
and comorbidities. From developing formularies that help guide 
patients to clinically sound medications to performing safety 
and quality checks on millions of prescriptions each day, we 
are the connective fiber fighting to ensure access to safe, 
effective, and affordable medications.
    Many members of this Committee have expressed concerns 
regarding the viability of pharmacy access in rural and 
underserved America. As a pharmacist and someone who grew up in 
rural America myself, I understand this challenge and agree it 
must be addressed. Over the past year, we have worked to 
enhance reimbursement to pharmacies serving these areas, 
created new pharmacy revenue streams through clinical services, 
and we have regularly convened an advisory committee of 
independent pharmacists led by a former independent pharmacist. 
Over the past 5 years, the number of independent pharmacies in 
our network has increased by 20 percent.
    I know there are questions regarding the transparency of 
pharmacy benefit services. Transparency is built into all of 
our pricing models, including our principal revenue sources, 
arrangements with manufacturers, and pharmacy claims data. 
Personalized information about the cost of prescription drugs 
is provided to millions of patients in real time to help them 
make more informed decisions with their doctors. I also know 
significant challenges remain. The median cost of a new 
medication in 2023 was $300,000, up from $180,000 in just 2 
years. As newer and more sophisticated therapies continue to 
come to market with increasingly unsustainable prices, we need 
solutions to ensure people who need them can benefit from these 
innovations affordably.
    Challenging our efforts to lower prescription drug costs 
are brand drug makers who exploit the patent system to maintain 
high prices for years beyond the date generics and biosimilars 
should become available to patients. For example, the primary 
patent for Humira, the best-selling drug in the world, expired 
in 2016. But biosimilar competition could not launch until 2023 
because of the patent thicket constructed by the manufacturer. 
We applaud recent efforts to drive more competition and address 
patent abuses intended to maintain high drug prices. These 
efforts will lower prices for American patients and save 
billions for American businesses and taxpayers.
    In closing, our mission and our business model, one, 
provide innovative solutions that enable access to medications 
at affordable costs and improved health outcomes; two, ensure 
clients have choices that enable them to deliver accessible, 
affordable pharmacy benefits; and three, share additional 
levels of transparency about the value we create. I appreciate 
this opportunity to answer your questions about our role and 
how the value we create reaches patients. Thank you.
    Chairman Comer. Thank you. Dr. Conway.

                   STATEMENT OF PATRICK CONWAY, M.D.

                        CHIEF EXECUTIVE OFFICER

                                OPTUM RX

    Dr. Conway. Thank you, Chairman Comer, Ranking Member 
Raskin, and Members of the Committee. I am Dr. Patrick Conway, 
CEO of Optum Rx, a part of United Health Group. Optum Rx is a 
pharmacy services company that works to make healthcare more 
affordable and accessible and to improve health outcomes for 
our customers and patients. I am also a pediatrician, seeing 
patients on weekends at a Boston hospital, and I would like to 
share one experience from my earliest days as a physician that 
I will never forget and shapes my mission for patient care.
    I sent a child home from the hospital with a prescription 
for a common antibiotic to treat a mild infection. In less than 
24 hours, the child was back, readmitted, because when the 
mother took the prescription to the pharmacy, it cost $200 that 
she did not have. A scared kid and a terrified parent spent 7 
days in a Boston hospital because they could not afford an 
antibiotic. This was a costly outcome for the system and, most 
importantly, an example of how we must do better for patients 
and families.
    Experiences like that one, the realities that people face 
when it comes to paying for medicine and accessing care, drive 
our work at Optum Rx. They are what we have in mind when we 
deploy innovations like our Critical Drug Affordability Program 
that offers low or zero-dollar cost sharing on more than 290 
brand and generic medicines including common antibiotics. Optum 
Rx exists to ensure patients have access to the safe and 
effective prescription drugs they need while managing their 
cost. My testimony focuses on how we do just that.
    I would like to start with our critical role in 
prescription drug affordability and access. The high price of 
new drugs are challenging the healthcare system. In 2023, the 
median annual list price for a new medicine was $300,000, a 40-
percent increase from 2021. The 5,000 plus customers who hired 
us, including employers, unions, health plans, and governments, 
rely on Optum Rx to be the counterweight to drug manufacturers' 
high and increasing list prices.
    Our negotiated discounts and clinical tools deliver more 
than $2,000 per person in average annual drug savings, and a 
recent analysis found that PBM saved the broader healthcare 
system approximately $145 billion annually. Today we compete 
with more than 70 companies that offer a full range of pharmacy 
benefit services. We compete on the strength of our clinical 
capabilities, patient support programs, drug trend analytics, 
and our ability to lower drug costs for our customers.
    Everything we do is rooted in a clinical foundation, 
starting with our independent Pharmacy and Therapeutics 
Committee, which, through clinical rigor, provides unbiased, 
evidence-based review of new and existing drugs and their place 
in therapy. We offer clinical programs and affordability tools 
to support each stage of a patient's healthcare journey. We 
also offer our customers a wide range of formularies and 
pricing solutions to meet their affordability, predictability, 
and accessibility expectations. We negotiate with drug 
manufacturers to secure the lowest possible net cost for our 
customers. More than 90 percent of prescriptions are for low-
cost generics, often without rebates, so negotiated discounts 
on the remaining 10 percent of expensive branded drugs are the 
only check on manufacturers' pricing power. Optum Rx passes 
through 98 percent of those discounts to our customers.
    Our customers recognize the value of our work. In a recent 
survey, 97 percent of employers said they were satisfied with 
their PBM, and 93 percent said that it is essential to have the 
flexibility in how they offer prescription benefits to their 
employees. Our customers have diverse priorities, and 
preserving the options available to them is critically 
important. Optum Rx is committed to providing its customers 
with actionable transparency that helps them understand their 
options and how their pharmacy dollars are being spent. We are 
also committed to supporting our pharmacy partners by, for 
example, promoting their value as care providers in rural and 
underserved areas. We support legislation that will preserve 
and grow options for planned sponsors and how they offer 
coverage.
    Congress should also take steps to rein in drug 
manufacturer patent abuses that have delayed generic and 
biosimilar launches, inhibiting the true market competition 
that leads to lower prices. We believe this holistic approach 
helps promote affordable and accessible prescription drugs. 
Several legislative proposals currently under consideration 
would work at cross-purposes with these goals. We believe these 
proposals would not lower manufacturer list prices, but would 
result in increased drug costs for employers, unions, health 
plans, and governments. We look forward to continuing our 
shared work addressing affordability and access to prescription 
medicines.
    Thank you for your time today, and we welcome your 
questions.
    Chairman Comer. Well, thank you all very much for your 
testimony. We will begin with questions. The House has called 
votes, but we have agreed I am going to get my questions in and 
Mr. Raskin will get his in, and then we will take a recess 
until 10 minutes after the final vote. So, I recognize myself 
for 5 minutes.
    Mr. Joyner, are you familiar with CVS Caremark's lawsuit 
with New York Cancer and Blood Specialists regarding DIR fees?
    Mr. Joyner. I am.
    Chairman Comer. Last week, the Southern District of New 
York ruled in favor of the practice and ordered CVS Caremark to 
pay over $20 million in back DIR fees, interest, and attorney's 
fees.
    I ask unanimous consent to enter that ruling into the 
record.
    Without objection, so ordered.
    I understand that other oncology practices are in 
arbitration with CVS Caremark over the same issue and you are 
attempting to prevent those from becoming public. Given the 
Federal Court findings, do you intend to pay all practices back 
for a clear miscalculation of DIR fees, or do you intend to 
fight them all like you did the New York practice?
    Mr. Joyner. Thank you, Mr. Chairman. In specific response 
to these cases, we do actually comply with all Medicare Part D 
rules, and, in fact, part of this is actually creating network 
adequacy and also making sure we are managing the network 
according to the terms and conditions. So, in this case, our 
goal is to apply these consistently across all 65,000 
pharmacies and, most importantly, making sure we get the right 
drug to the right patient at the right cost.
    Chairman Comer. So, are you going to fight the other 
rulings, or are you just going to pay, just out of curiosity, 
have you decided yet, the other lawsuit?
    Mr. Joyner. Yes. Consistent with what I had mentioned 
earlier, we do comply with the Medicare Part D rules, and we 
will make sure that we are consistent.
    Chairman Comer. OK. This next question is to all the 
witnesses. During the Committee's investigation, we found 
evidence that each of your companies steer patients with long-
term maintenance and other high-cost medications to the mail-
order pharmacies you own, even though it often results in more 
difficulty for a patient to get their medication. Will you 
commit to stop steering patients to the pharmacies you own and 
instead let them choose the pharmacy that is best for them and 
pay the same price for the same prescription regardless of 
where they pick up the prescription? Dr. Conway?
    Dr. Conway. We do provide patient options, including home 
delivery, and we will continue to provide those options to 
patients.
    Chairman Comer. Dr. Kautzner?
    Dr. Kautzner. Thank you for the question, Chairman. We 
focus on our clients--employers, labor unions, government 
entities--to make those decisions on their plan benefit 
designs, and so they make the decision on what types of 
pharmacies they want to provide.
    Chairman Comer. So, are you denying that the PBMs steer 
patients from the independent pharmacies to your own mail-order 
pharmacies?
    Dr. Kautzner. So, we carry out the benefit designs that our 
clients choose, and that is how we provide our services. For 
home delivery pharmacies today, the safety and efficacy for 
those patients----
    Chairman Comer. Mr. Joyner, will you commit to----
    Mr. Joyner. Yes. Mr. Chairman, we will continue to offer 
home delivery at the request of our customers.
    Chairman Comer. So, I am going to take that as an answer. 
You are going to continue to steer patients away from 
independent pharmacies to your own mail-order pharmacy. That is 
how I interpret those answers.
    Next, during the Committee's investigation, we found 300 
examples of PBMs placing higher-cost medications in more 
preferred positions on formularies. A report that just came out 
found that not only are you prioritizing higher-cost 
medications, you are setting dramatically different prices for 
some medications across the country. The report found that 
Suboxone, a critical treatment for opioid abuse, is being 
charged at 600 unique prices by just one of your companies, and 
another is charging 448 unique prices. Out of the top five 
PBMs, the lowest number of price points was over 200. Your 
companies have constantly claimed that drug companies set 
market prices, but if that is the case, why are your companies 
charging different prices across the country? Mr. Joyner?
    Mr. Joyner. So, specifically, as it relates to creating 
competition with the manufacturers, we have done a remarkable 
job of lowering the cost of brand pharmaceuticals. In fact, if 
you look over the time period of 2017 to 2022, brand-name drugs 
have decreased by 15 percent. So, in keeping with our goal and 
our focus as a pharmacy benefit manager, it is to create the 
competition and lower the cost of pharmaceuticals for the 
customers which we serve.
    Chairman Comer. Dr. Kautzner?
    Dr. Kautzner. Last year alone, we saved our clients $64 
billion, and we kept patient out-of-pocket costs on a per-
prescription basis at just $15, despite brand manufacturers 
raising drug prices on 60 percent of those products. It is hard 
work to keep those costs down for patients and clients.
    Chairman Comer. Dr. Conway?
    Dr. Conway. As you said, manufacturers set the high list 
prices, but we are committed to providing the lowest net cost 
options to our clients so the drugs are more affordable to the 
people they serve.
    Chairman Comer. So, your testimony today, it is not the 
PBMs, it is the drug manufacturers. That is the answer, because 
that is not what our report has concluded. That is not what we 
hear from doctors all across America. That is not what we hear 
from pharmacists all across America. We hear that you are the 
problem, and that is why we have had three hearings on this. 
This is why this is a huge issue. This is why just about every 
state now is taking up PBM reform.
    There is a credibility issue with the PBMs, there is a 
transparency issue with the PBMs, and it does not appear that 
the PBMs are being consistent. We believe you have 
anticompetitive policies. I have more questions, but my time 
has expired. I will get some more time in a minute. I yield now 
to Ranking Member Raskin.
    Mr. Raskin. Thank you, Mr. Chairman. I wonder, do any of 
you guys have high school-aged children? You do, Dr. Conway. 
All right. So, do not set this at the elementary school level 
because I do not want it to be just you trying to help people. 
Do not set it at the Ph.D. level, but set it at the high school 
level. Explain to a high school student what the PBM does and 
what value you render in America's confusing healthcare system. 
Could you?
    Dr. Conway. Yes. So, the way I would describe it to a high 
school student is the following. We provide lower-cost drugs to 
the people we serve--employers, unions, state governments, 
others--and we provide accessible, affordable options to 
people. It is based on clinical evidence on what medicines are 
most effective, and then we negotiate for the lowest net cost 
transparently and provide that information both to the customer 
and to the patients we serve.
    Mr. Raskin. OK.
    [Chart]
    Mr. Raskin. The graphic behind me shows that when combined, 
the larger healthcare conglomerates, to which your three 
companies belong, control 20 percent of America's national 
healthcare expenditures, a figure that has been growing 
substantially. And the three PMs represented today, independent 
of their parent companies, are so big that you would all fall 
within the top 40 businesses in America by revenue, and this 
size means that collectively you control nearly 80 percent of 
prescription drugs dispensed in the country. The next three 
largest PBMs account for 5 percent of the market, and the 
remaining 60 PBMs account for 6 percent of prescriptions 
managed and dispensed. OK.
    So, Mr. Joyner, let us take you. Excluding the two large 
companies represented at the table along with you today, of the 
60 PBMs that account for just 6 percent of the market, which 
does CVS Caremark consider to be, say, its top three 
competitors?
    Mr. Joyner. So, there are a variety of competitors, 70-plus 
PBMs in the marketplace all competing respectively for 
customers. This is a highly competitive marketplace, and we 
basically win and lose based off the value proposition that we 
present to our customers.
    Mr. Raskin. OK. So, who would be the top three outside of 
the mega corporations represented? Who would be your top three 
competitors for that 6 percent?
    Mr. Joyner. Yes. It will depend on the market segment. So, 
there are some Blue Cross Blue Shield solutions that compete 
effectively within that, so that would obviously be a 
competitor for that particular segment of the marketplace.
    Mr. Raskin. OK. Well, would you agree that the PBMs should 
be held accountable to the patients and not just the 
institutions you represent, or would you disagree with that? 
Dr. Kautzner, let me ask you.
    Dr. Kautzner. We are absolutely, Ranking Member Raskin, 
accountable to our patients, and I think it is important to 
recognize that.
    Mr. Raskin. Can you explain how you are held accountable to 
your patients?
    Dr. Kautzner. Sure. Every prescription that we process 
today undergoes 18,000 safety, quality, and benefit checks in 
less than 1 second. And with that work, we will prevent 
approximately 100 million potential medication errors this 
year, so that is how we positively affect patients. We also----
    Mr. Raskin. Right, but that is different from the question 
of accountability, so, I mean, the answer could be, no, that is 
not your function in the marketplace. But is there any 
accountability mechanism between you and the actual patients, 
or do you just deal with the institutions, the businesses, the 
unions, and so on that you represent?
    Dr. Kautzner. So, our contracts are with employers, labor 
unions, government entities, but we absolutely are committed to 
patient care and health and care coordination. That is why we 
employ thousands of nurses and pharmacists within our 
organizations to provide that high-quality clinical care.
    Mr. Raskin. All right. Can you explain again and put it in 
clear terms because a lot of this stuff is hard for people to 
understand, OK? Why is it that there are so many cases that the 
Committee has found--the Chairman has cited them--where people 
are ending up being charged 10 times more within one of the 
plans than they would be if they were just to go and pay out of 
pocket for a drug? Why does that happen? Can you explain that?
    Dr. Kautzner. So, today, for over 80 percent of patients in 
America, they spend less than $250 on all of their 
prescriptions in a given year. There are 1 percent of patients 
where challenges still exist, where that 1 percent may spend 
over $2,000 annually on prescription drugs. That is the group 
that we are providing patient savings programs for and working 
hard to provide improved patient benefit designs so that we can 
keep costs down in that area.
    Mr. Raskin. Again, I feel like the more I hear, the less I 
understand. I mean, I just have one simple question. If 
somebody is covered by one of the plans, how is it possible 
that they have got to pay 10 times more than they would pay if 
they were just to go and pay out of pocket for the drug? I 
mean, Mr. Joyner, can you explain why that would happen? And, I 
mean, I am willing to believe maybe that is not the majority of 
the cases. I think that is what you are saying, Dr. Kautzner. 
But can someone just tell us why that happens and it can help 
us understand the dynamics of this market?
    Mr. Joyner. Yes. As I said earlier, there are a variety of 
different pricing models in the marketplace today. What you are 
referring to is what, generally, is an average pricing that we 
have contracted with our clients. The good news is, and as I 
mentioned earlier about coming back into CVS Caremark, is I am 
trying to change and transform the marketplace, which is in 
large part why we introduced TrueCost, which is a price model 
that actually allows us to guarantee every drug at every 
pharmacy across 14,000 different medications. So, that would, 
in effect, get you to the consistency and actually eliminate 
many of the headlines that you are referencing.
    Mr. Raskin. All right. My time is up, Mr. Chairman. Thank 
you for your indulgence, and I look forward to questioning by 
our colleagues, including Representative Auchincloss, who is a 
real specialist in this. And I hope we will just get some 
illumination today about some of these strange things we found. 
Thank you.
    Chairman Comer. Thank you. The Ranking Member yields back. 
Before we recess, I will make an announcement. Director Cheatle 
just resigned from the Secret Service.
    Mr. Raskin. Well done, Mr. Chairman. That was a great 
hearing.
    Chairman Comer. Maybe you should sign more letters with me. 
No telling what we could do.
    Mr. Raskin. I mean, bipartisanship might be the wave of the 
future.
    Chairman Comer. All right. Pursuant to the previous order, 
the Chair declares the Committee in recess, subject to the call 
of the Chair.
    [Recess.]
    Chairman Comer. The Committee will come back to order.
    I now recognize the gentleman from Alabama, Mr. Palmer, for 
5 minutes.
    Mr. Palmer. Thank you, Mr. Chairman. I have got a number of 
concerns about how PBMs have operated and how it is impacting 
rural pharmacies. I grew up in rural Northwest Alabama and 
understand a lot of the pressures that are being placed on 
independent pharmacies, and I have just got some questions that 
I would like to run by.
    There has been some significant confusion as to how much of 
the direct and indirect remuneration fees PBMs retain in the 
Medicare Part D program. So, I would like to try to clear that 
up. And if you could answer this, what percentage of DIR that 
your companies receive from competing pharmacies, in terms of 
what percentage are distributed to the U.S. Government--you 
might want to write this down--patients, insurer, or the plan 
are retained by the PBM? Mr. Joyner?
    Mr. Joyner. Congressman Palmer, the program you are 
referencing was discontinued in 2023.
    Mr. Palmer. That program was discontinued?
    Mr. Joyner. Yes. Yes, sir.
    Mr. Palmer. Can you tell me what percentage of the funds 
were retained in those categories up until then?
    Mr. Joyner. The program you are referring to was a 
performance-based network, and it was distributed to the high-
performing pharmacies as a way of actually rewarding and 
recognizing or incentivizing high performance within the 
pharmacy network.
    Mr. Palmer. You did not answer. You are not answering the 
question. So, what I would like to do is rather than go through 
this exercise of delay is just have each of you respond in 
writing to the Committee. Mr. Chairman, I would like to make 
sure that they do that.
    Mr. Palmer. The three largest PBMs control over 80 percent 
of the market and wield enormous influence over America's 
access to prescription drugs and the prices that the people who 
need those drugs have to pay. And the PBMs tout themselves as 
companies that are reducing the cost of medications for all 
Americans. Yet the cost of prescription drugs and the spending 
on prescription medications have gone up every year for more 
than a decade. And so, it just raises the question, you know, 
how can you convince the American people that you are helping 
reduce the cost of prescription drugs when they have gone up so 
much? Dr. Kautzner?
    Dr. Kautzner. Thank you for the question, Congressman. So, 
for patients that we serve, in 2023, patients spent less out of 
pocket on average for a 30-day prescription as they did in 
2022, despite brand manufacturers raising prices on 60 percent 
of those drugs.
    Mr. Palmer. What we saw is that some name-brand drugs were 
costing 35 times more, and that is the information that I have 
been given at PBM-owned mail-order pharmacies than independent 
pharmacies, and so I do not understand why there would be that 
much of a disparity. How could it be that on some of these 
drugs, and I am not saying all of them, but on the PBM-managed 
mail-order pharmacies, they would be 35 times higher? How do 
you explain that?
    Dr. Kautzner. So, Congressman, I would be happy to look at 
those individual examples and be able to get back to you on 
those pieces.
    Dr. Kautzner. What I can say is, on average, today, our 
employers make the decision on whether they want to have a home 
delivery pharmacy included in their network or not, so that is 
completely up to them.
    Mr. Palmer. But do you think it is acceptable to charge a 
substantially higher price through a program that, say, an 
employee has to be in than what a competitor would charge if 
they had access to the competitor's plan?
    Dr. Kautzner. So, our employers hold us accountable to 
ensure that we are administering benefits at their direction 
that are providing lowest net cost for patients and for them. 
We help them build those benefit designs to do that.
    Mr. Palmer. I mean, there is a New York Times article that 
exposed how PBMs operate in the marketplace, highlighting how 
they are driving independent pharmacies out of business, and 
they are not paying enough to cover costs. CVS Caremark 
overcharged an Oklahoma health plan for state employees 
$120,000 for just one cancer patient's medication. They also 
overcharged an Illinois cancer patient hundreds of dollars more 
than needed due to Caremark's formulary requiring her to use 
the more expensive version of the drug. Express Scripts forced 
a New Jersey retiree to pay $211 for his allergy medication 
when he could have gotten it for $22 at Costco.
    So, each of you, I just want you to explain why you 
overcharge patients, employers, and the Government at some 
fairly exorbitant rates but often reimburse pharmacies less 
than it costs them to buy the drug in the first place. That 
does not make sense. You can respond to that. I know my time 
has expired. Each one of you can respond to that.
    Mr. Joyner. So, our experience proves that we actually pay 
CVS pharmacies less than we do other pharmacies in our network, 
and, in fact, when we do have people go into our pharmacies, 
they are paying, on average, 4.7 percent less.
    Mr. Palmer. Mr. Joyner, you could pay a huge pharmacy like 
CVS less and still be overcharging, creating a massive 
disadvantage for the other pharmacies because their volume is 
so much lower. I will yield back, but let them respond, Mr. 
Chairman.
    Chairman Comer. OK. The gentleman's time has expired, but 
please feel free to answer the question. Anybody?
    Dr. Kautzner. Yes, happy to answer the question, 
Congressman. So, I grew up in rural America. I went to 
independent pharmacies growing up. I know that they are the 
major point for access to care for many underserved areas, both 
in urban and rural areas. Our focus as an organization has been 
to, one, help them evolve their business model to provide high-
quality care in new and different ways, whether those are strep 
tests, biometric tests, behavioral screenings, those types of 
things. We also have convened an independent Rx initiative for 
independent pharmacists. So, we are convening on multiple times 
a year now 3 dozen independent pharmacist owners to help work 
with them so that we can become more productive together 
because we do agree that having independent pharmacies strong 
in our network is something that we feel passionate about. And 
actually, in the last year, 1,400 independent pharmacies have 
increased in our network in the last year. So, our work is 
paying off, and we are seeing more independent pharmacies 
continue to come into business and join our network.
    Mr. Palmer. Mr. Chairman, I just want to make sure that 
people understand that when you have these huge pharmacy chains 
that do a massive volume, that they could actually make less on 
per transaction, but the cost of the volume still make a 
healthy profit than a smaller independent that does not have 
that volume. I yield back.
    Chairman Comer. The gentleman yields back. Mr. 
Krishnamoorthi, are you ready, or do you want to leave?
    Mr. Raskin. We will go to Dr. Foxx.
    Chairman Comer. Or I can go to Dr. Foxx. You want to go?
    Mr. Krishnamoorthi. I can go.
    Mr. Raskin. Krishnamoorthi.
    Chairman Comer. OK. The Chair recognizes an expert on PBMs, 
Mr. Krishnamoorthi from Illinois.
    Mr. Krishnamoorthi. Thank you, Mr. Comer, and thank you to 
the gentlemen and the witnesses. I understand that you are here 
today to advance what I understand to be your shared position, 
namely as the CEO of your trade association. PCMA recently 
stated, ``Nothing can change the fact that PBMs have a proven 
track record of reducing prescription drug costs.'' Mr. Joyner, 
this is your collective position, correct?
    Mr. Joyner. That is correct.
    Mr. Krishnamoorthi. Well, I would like to just review some 
documents. First of all, in an interim staff report released 
this month, the FTC calls PBMs, ``the powerful middlemen 
inflating drug costs and squeezing Main Street pharmacies.'' 
Mr. Joyner, that is what the FTC says, correct? It is right 
here.
    Mr. Joyner. That is correct.
    Mr. Krishnamoorthi. Now, let me just point to another 
headline, this time in the New York Times. The headline of this 
New York Times article is, ``The Opaque Industry''--referring 
to PBMs--``Secretly Inflating Prices for Prescription Drugs.'' 
Dr. Conway, you do not deny that the New York Times headline 
says this, correct?
    Dr. Conway. That is the headline.
    Mr. Krishnamoorthi. And further, at least eight different 
states have filed lawsuits alleging that PBMs are inflating 
drug prices and engaging in anticompetitive behavior. In fact, 
Ohio Attorney General Dave Yost states, ``Express Scripts has 
used its dominance solely for its financial gain, creating a 
complex pay-to-play rebate system that perversely pushes 
manufacturers to increase drug prices in order to be placed on 
or receive preferred placement on PBM formularies.'' Now, Mr. 
Kautzner, you do not deny this is what Attorney General Yost 
said about your company, correct?
    Dr. Kautzner. I do not recall seeing that exact quote, sir.
    Mr. Krishnamoorthi. Well, I will just show you. It is right 
here.
    [Poster]
    Mr. Krishnamoorthi. This is on their website. Ohio Attorney 
General Dave Yost, it says exactly what I said. You do not deny 
that is what Dave Yost said, right?
    Dr. Kautzner. It appears that is what the document you are 
showing says.
    Mr. Krishnamoorthi. So, on the one hand we have PBMs 
claiming to reduce prescription drug prices, and on the other 
hand we have the Federal Trade Commission, we have major media 
outlets like the New York Times, we have at least eight 
different attorneys general, Democratic and Republican, who all 
say that PBMs are inflating drug costs. I wonder whom the 
American people should believe.
    I want to turn to another topic. That is the question of 
DIR fees, and I see some pharmacists in the audience. They 
probably understand what I am talking about here. DIR fees are 
the most insidious part of a class of fees known as post-sale 
adjustments or pharmacy price concessions. Essentially, DIR 
fees are clawbacks. They are clawbacks that PBMs get from 
pharmacies when the PBMs decide not to pay the originally 
agreed to reimbursements for the medicines that pharmacies have 
already dismissed in the past, in history.
    So, let me look at the July FTC report and what they say 
about this. They note various public comments stating that DIR 
fees are unexplainable, create needless uncertainty for 
pharmacies, and are ``a charade.'' The Centers for Medicare and 
Medicaid Services says that pharmacy price concessions, of 
which DIR fees are a part, exploded by 107,400 percent between 
2010 and 2020, a rate of increase that literally staggers the 
imagination. I am not making this up. This number actually 
comes from CMS. This is not a typo. Mr. Joyner, this is what 
CMS says about pharmacy price concessions, correct?
    Mr. Joyner. Yes.
    Mr. Krishnamoorthi. The top five executives at each of the 
corporations that own the PBMs represented today have all had 
significant increases in their paid compensation over the past 
3 years. Andrew Whittey, the CEO of UnitedHealthcare, earned 
between $18 million and $23.5 million, David Cordani saw his 
CEO composition go from $20 million to $21 million, Karen 
Lynch, the CEO of CVS, went from $20 million to $22 million, 
all in the span of 3 years. All at the same time we have these 
staggering DIR fees that have gone up by 107,000 percent over 
the last decade. At the same time, there have been 7,000 
pharmacy closures during that time.
    So, what is wrong with this picture? You have fees 
skyrocketing, you have pharmacy closures skyrocketing, you have 
drug costs increasing, and then you have CEO compensation at 
these different companies, that are called PBMs, also 
increasing. That is why Congress is scrutinizing this 
particular problem today. Thank you, and I yield back.
    Chairman Comer. The gentleman yields back. The Chair now 
recognizes Dr. Foxx from North Carolina.
    Ms. Foxx. Thank you very much, Mr. Chairman, and I want to 
associate myself with the comments of my colleague from 
Illinois. There is great concern, and the numbers that he put 
out have to be paid attention to. As you know, I Chair the 
Committee on Education and the Workforce, on which many Members 
of this Committee serve, and we have spent this Congress 
focused intently on improving transparency in healthcare and 
addressing the practices of pharmacy benefit managers, PBMs, in 
order to deliver lower healthcare costs to patients and plans. 
And, again, as you have heard from members, this is a concern 
all over Congress.
    I am proud of the House's broad bipartisan support for the 
Lower Cost, More Transparency Act, legislation that will 
require PBMs to provide employers the information needed to 
make informed healthcare purchasing decisions on behalf of 
their employees, and I look forward to continuing to work with 
my Senate colleagues to enact it this year.
    Today, we have CVS Caremark, Express Scripts, and Optum Rx 
or the ``Big Three'' represented, which own 80 percent of the 
U.S. PBM markets, and we need to know what impact this 
consolidation has on overall prescription drug prices, and I am 
going to ask you to give succinct answers. With an increase in 
consolidation, what incentives exist for PBMs to negotiate 
better rebates? Mr. Joyner? Quick answer.
    Mr. Joyner. Thank you, Congresswoman. The goal here and how 
I am measured by my customers is my ability to lower costs for 
themselves and for the members they serve. So, that is how I 
compete, and that is ultimately, you know, how they judge and 
value our performance.
    Ms. Foxx. Dr. Kautzner?
    Dr. Kautzner. Congresswoman, we operate in a highly 
competitive environment today. Every request for proposal that 
clients put out, you will see a half dozen or more PBMs that 
are competing aggressively for that business, and we have to 
continue to extract value out of pharmaceutical manufacturers 
to show that value to patients.
    Ms. Foxx. Only a half dozen or more. That is a revealing 
number. Dr. Conway?
    Dr. Conway. Thank you. We compete in a highly competitive 
market. We compete on clinical programs, transparency choice, 
and lowest net cost, and the Optum Rx retention of customers is 
98-plus percent.
    Ms. Foxx. The Federal Trade Commission's interim report on 
PBMs found that your three PBMs increasingly rely on group 
purchasing organizations, GPOs, which received roughly $7.6 
billion in fees from drug manufacturers in 2022. Section 402 of 
the Lower Cost, More Transparency Act would require PBMs to 
disclose to plan sponsors fees received from manufacturers 
through the GPOs. For each of you, does your PBM pass on fees 
received from drug manufacturers and through GPOs back to plan 
sponsors in the form of rebates or otherwise? If so, what 
percentage of such fees do you pass on? Mr. Joyner?
    Mr. Joyner. Congresswoman, we pass over 99 percent of 
rebates in administrative fees across our book of business, and 
in Medicare, we pass 100 percent back to the government.
    Ms. Foxx. Dr. Kautzner?
    Dr. Kautzner. We do absolutely pass back rebates and fees 
to our clients. Many of our clients can receive 100 percent of 
those fees if that is the type of benefit design that they 
choose, and we charge a simple per claim fee for that type of 
service.
    Ms. Foxx. Dr. Conway?
    Dr. Conway. Similarly, the majority of our clients have 100 
percent passthrough of rebates to our clients, and, on average, 
we are 98 plus rebate passthrough to clients as well, and it is 
their choice.
    Ms. Foxx. This Committee has received testimony and 
documents that illustrate that transparent PBMs can achieve 
dramatically higher cost savings than your three companies. If 
that is truly the case, should not all PBMs be transparent? I 
just need a ``yes'' or ``no'' answer. Mr. Joyner?
    Mr. Joyner. Congresswoman, we are transparent.
    Ms. Foxx. OK.
    Mr. Joyner. So, we compete in a transparent world.
    Ms. Foxx. OK. Dr. Kautzner?
    Dr. Kautzner. We are transparent as well and have 
transparent offerings that compete with other transparent PBMs.
    Ms. Foxx. Dr. Conway?
    Dr. Conway. Yes, we are transparent to customers and to the 
patients we serve.
    Ms. Foxx. Mr. Chairman, I would like to ask one more 
question if you will indulge me.
    Chairman Comer. Please.
    Ms. Foxx. Thank you.
    Chairman Comer. I have never told you no.
    Ms. Foxx. Thank you.
    Chairman Comer. I am afraid to tell you no.
    Ms. Foxx. I would not tell you no either. In the employer-
sponsored market, plan sponsors have a fiduciary responsibility 
to their employees to provide the highest-quality plan for the 
lowest cost. How do large PBMs help employers fulfill their 
fiduciary duties? And, again, a quick answer so I do not abuse 
my privilege from the Chairman.
    Mr. Joyner. Today we are contracted with our customers to 
deliver on the contractual commitments they have given to us. 
So, in large part, it is making sure that we both deliver and 
execute against the guarantees and the contracts that they have 
negotiated with us.
    Ms. Foxx. Thank you.
    Dr. Kautzner?
    Dr. Kautzner. Congresswoman, we focus on lowest net costs 
for our clients and for patients to deliver that value.
    Ms. Foxx. Dr. Conway?
    Dr. Conway. Yes, we provide transparency and choice to our 
customers, including plan employers, and compete on lowest net 
cost and best clinical programs.
    Ms. Foxx. Thank you, Mr. Chairman. I appreciate the 
indulgence.
    Chairman Comer. The Chair now recognizes Mr. Connolly from 
Virginia.
    Mr. Connolly. Thank you, Mr. Chairman. PBMs and Big Pharma 
play a blame game, do they not, Mr. Joyner? Big Pharma 
certainly sets drug prices in America and maximizes profit to 
its best ability. Would you agree with that?
    Mr. Joyner. I would.
    Mr. Connolly. Would you speak up in the mic, please?
    Mr. Joyner. Yes, sir. I agree.
    Mr. Connolly. OK. And this Committee has had hearings on 
drug pricing in the past, including, in some cases, really 
egregious examples of price gouging on generic drugs, on very 
old drugs like insulin, for example, which have not 
particularly been improved much over 100 years. How we deliver 
them, yes, but the basic insulin drug has not changed much. And 
as you know, that led to moves here in Congress to actually cap 
the price of insulin at $35 rather than have tens of millions 
of Americans suddenly not be able to afford a lifesaving drug. 
Any views on that particular example?
    Mr. Joyner. I think CVS Caremark has a particularly strong 
track record in this one category. These are branded 
medications. And if you look at our ability to lower the cost 
of insulin, both for our customers, which has actually seen a 
reduction for our plan sponsors that we serve, and, ultimately, 
the patients that are on these insulin therapies are paying 
less than $25 today. So, we have done a really nice job, I 
believe, of using competition to lower costs for the customers 
that we serve and, ultimately, to the benefit of the patients 
that are on these important therapies.
    Mr. Connolly. That is kind of a more recent development, is 
it not?
    Mr. Joyner. No, sir. We created the competition back in 
2012, and from that point forward, you have seen the cost of 
insulin continue to decline. And so, the recent change where 
the manufacturer actually lowered the list price, which we 
applaud, came after we actually negotiated significant 
discounts to lower the cost for our customers.
    Mr. Connolly. Do you believe that the move to, for example, 
lower the price of insulin might have had anything to do with 
growing political pressure, including political pressure up 
here, to force the hand of both Big Pharma and you, otherwise--
that is to say lower the price--or we will do it for you 
legislatively? Do you think that had any relationship at all to 
the decision?
    Mr. Joyner. Yes, it is plausible, plus there was a----
    Mr. Connolly. Plausible?
    Mr. Joyner. Yes, and there was a change in the way in which 
Medicaid priced this category. So, because they removed the 
cap, that actually would have penalized the drug manufacturer 
for the price increases that they have taken over the last 
decade.
    Mr. Connolly. So Big Pharma maximizes profits, but, of 
course, so do PBMs, right?
    Mr. Joyner. Our job is to continue to lower the cost for 
the customers which we serve.
    Mr. Connolly. Lower the cost?
    Mr. Joyner. Correct.
    Mr. Connolly. So, when we compare drug prices in the United 
States to Europe or Canada, in your efforts to lower costs, do 
we see American drugs actually lower in price for consumers 
than in Europe or Canada?
    Mr. Joyner. For the generic drugs, which is 9 out of every 
10 prescriptions in this country are generic medications, and 
we believe we have done a remarkable job of lowering the cost 
of generics----
    Mr. Connolly. That is not my question.
    Mr. Joyner [continuing]. And the brands that actually 
represent the remaining 10 are more expensive than they are 
around the world.
    Mr. Connolly. Why?
    Mr. Joyner. Because the rest of the world negotiates for 
price in order to have access in their country.
    Mr. Connolly. So, we do not do that?
    Mr. Joyner. Beginning in January 2026, our government will 
start the first 10 drugs that will be negotiated on behalf of 
Medicare.
    Mr. Connolly. And do you expect prices to come down with 
that negotiation?
    Mr. Joyner. I believe the PBM industry, and specifically 
CVS Caremark, has done a really nice job of lowering the cost 
of those 10 medications that are there, and our hope is that 
there will be continued reduction in cost.
    Mr. Connolly. Yes, we all hope for that, but I was asking 
about the actual process and what the relationship is between 
that process and the expectation that there will in fact be 
lower drug prices. You just said our drug prices, in fact, are 
higher than most of the rest of the world. Same drug. And so, 
we all want to understand on behalf of our constituents and 
consumers, well, why would that be? Why would that be if it is 
the same drug? And I think you have answered by saying, well, 
they negotiate prices, we do not. We are going to start doing 
it. We have got a list of the first 10, and that would suggest 
that consumers have been paying a premium simply for want of 
negotiation on prices for many years. Would that be a fair 
conclusion to draw?
    Mr. Joyner. I can only speak to the role of the PBM and the 
fact that we have done what I believe is a good job of creating 
competition and lowering costs, and I will just look at the 
last 5 years. We have been able to reduce the brand of 
medications by 15 percent by using competition in a free market 
to be able to lower the cost for our plan sponsors.
    Mr. Connolly. Yes, and good for you, but when you talk 
about lowering costs, it is relative to the previous price in 
America. It is not relative to the cost of drugs in other 
advanced, civilized places like Europe and Canada, right?
    Mr. Joyner. Correct.
    Mr. Connolly. All right. So, when we say lowering the cost, 
you know, there is lowering the cost and then there is lowering 
the cost, and hopefully PBMs will help cooperate in that 
regard. You know, all of us believe that when a manufacturer 
invests R&D in a development of a new drug, that manufacturer 
takes risk and is entitled within reason to recoup costs. But 
when you take a 100-plus-year-old drug like insulin and you 
suddenly jack up the price just because you can--I am not 
saying you do it; we had hearings on that--that actually puts 
lives in jeopardy. And so, maximizing profits, nothing wrong 
with that, but not at the expense of people's lives, not at the 
expense of people's health. And I think PBMs, as well as Big 
Pharma, have an absolute obligation, and so do we up here, in 
protecting consumers, especially when the system does not work 
for them.
    Thank you. I yield back, Mr. Chairman, and thank you for 
your indulgence.
    Chairman Comer. The Chair recognizes Mr. Timmons from South 
Carolina.
    Mr. Timmons. I appreciate my colleague across the aisle's 
remarks, but I think, with all due respect, you are missing the 
mark entirely. You are missing the mark entirely. Our country--
--
    Mr. Connolly. Well, not entirely.
    Mr. Timmons. No, our country is sick. Our country is sick. 
Why is Europe and Canada paying less? Because they do not have 
an enormous obesity problem because half of them do not have 
diabetes. I mean, all of these are preventable diseases. They 
are all preventable diseases. Mr. Joyner, what percent of the 
drugs that you sell treat trauma injuries, injuries of some 
kind, or genetic abnormalities? What percent? Ten, 15 percent 
of the drugs you sell?
    Mr. Joyner. I am not sure.
    Mr. Timmons. I bet it is less than 20. We can all agree. 
So, everything else is purely preventable. I mean, so we have 
all of these problems with drug prices, but we have a demand 
issue. We have a demand issue. This country is sick. I have 
seen more people getting dialysis in the last 6 years. I go to 
these dialysis clinics at least once a year, and it is sad. 
There is more of them, and there is more of them, and 95 
percent of people that have diabetes that need insulin can 
exercise and eat better and not have these problems. So, we are 
here to talk about who is making more money along the supply 
chain? Why do not we cut the supply chain off, cut the need 
off?
    People need to be healthier. They need to take 
responsibility for their health. They need to exercise. They 
need to eat right. Our entire healthcare system delays death 
and treats sickness. We do nothing to facilitate health and 
wellness, and we talk about Europe. I mean, their diabetes rate 
is drastically less, so yes, insulin is less. There is less 
demand. And the cost of insulin goes up because millions and 
millions of Americans are increasing the demand on it. A 
hundred and twenty-nine million people in this country have at 
least one major chronic disease, at least one major chronic 
disease. Heart disease, cancer, diabetes, obesity, hypertension 
are the lead. All of those are very preventable unless you have 
a genetic abnormality. I will even use myself as an example.
    I owned a CrossFit gym. I worked out every day, and I went 
to the doctor. I got some blood work done, and the blood work 
came back. She said, William, you have a cholesterol problem. I 
said, I am 10 percent body fat. I work out every day. What is 
up? And she said, well, what do you eat? At the time I was 
eating probably 16 ounces of steak a day. She was like, well, 
there is your problem, so I reluctantly changed my diet. I ate 
some fish, had some shrimp, ate some chicken. Go back, get my 
blood work done, not a problem. Could I, without any penalty, 
have continued eating 16 ounces of steak every day and gotten a 
pill, lived on that pill for the rest of my life and received 
no additional cost to me as a person? Yes, I could. That is our 
healthcare system. There is no accountability.
    And you know what is crazy? That cholesterol pill that I 
take, after a couple years I am probably going to get a blood 
pressure issue. So, there is a pill for that. And, you know, 
let us just say I stop exercising, gain weight. There is a shot 
for that. I mean, this is not how our country needs to be 
operating. It is just outrageous. So, we are here talking about 
drug prices. The way to address our healthcare system is by 
accountability, personal responsibility. We have to incentivize 
health and wellness and not delay death and treat sickness. So, 
I realize I am on my soapbox here, but we have a major problem 
in this country. We have some of the worst outcomes of any 
developed country, and we spend four times more. Average 
spending, what, almost $5 trillion, and we have one of the 
least healthy developed population in the world?
    So, I get it. We are fighting over drug prices, who along 
the supply chain is getting what and how they are doing that. 
We have to go to the root cause. We have to reduce the demand 
for all of these drugs. I mean, even the military is having a 
huge problem. We are having to constantly reduce our 
standards--reduce our standards
    --because we cannot field a professional military. I mean, 
this is a national security threat. We have $35 trillion in 
debt. We are adding $1 trillion to our debt every hundred days, 
and we have workforce issues because people are unable to work 
because they are at the dialysis clinic or they are too sick. 
And, again, 90 percent of all of this is preventable with diet 
and exercise.
    So, I understand that we are fighting over drug prices and 
who along the supply chain, but we have got to go to the root 
cause, and we have to get serious about incentivizing health 
and wellness and stop fighting over who gets what dollar as we 
delay death and treat sickness. And with that I yield back.
    Mr. Raskin. Would the gentleman yield for a question?
    Mr. Timmons. Absolutely.
    Mr. Raskin. Well, I am very drawn by your analysis, but 
would you take it one step further and say that Congress and 
the Federal Government should not be investing in Big Sugar and 
Big Dairy and in unhealthy agriculture practices that end up 
producing diabetes and unhealthy outcomes?
    Mr. Timmons. I do everything in my power to eat things that 
are from nature, and I will leave it at that.
    Chairman Comer. All right. The Chair now recognizes Mr. 
Khanna from California.
    Mr. Khanna. Thank you, Mr. Chair. Dr. Conway, you are here 
as CEO of Optum Rx, but before that you were a doctor, actually 
a well-respected doctor, a pediatrician, as I understand it. 
And so, I want to ask you, when you were a doctor, if you had a 
10-year-old, for example, who came in with arthritis and you 
recommended or prescribed Humira, do you believe that your 
judgment would be more valuable than some of your colleagues at 
Optum who may not have treated that patient?
    Dr. Conway. Sir, I am still a practicing pediatrician.
    Mr. Khanna. Wonderful. So, can you answer the question?
    Dr. Conway. So, in terms of clinical care, I believe 
clinical care should be based on evidence and the best medicine 
for the populations of patients.
    Mr. Khanna. But you would not privilege the doctor's 
opinion in that case? I mean, if you were treating a patient, 
10-year-old with juvenile arthritis, you say, OK, I think she 
needs Humira, would you agree that your opinion should be given 
more weight than someone at Optum, who may not actually treat 
that patient?
    Dr. Conway. So, I agree that prescriptions prescribed by 
physicians when consistent with the clinical evidence should be 
approved and given to the patient.
    Mr. Khanna. But that did not happen in the case of Cassidy, 
right? Are you familiar with this case where she was a 10-year-
old girl? She had juvenile arthritis, and her doctor prescribed 
Humira, but for 6 months there was denial of that medicine, and 
then the juvenile arthritis spread to her rib cage. Do you 
agree that that denial was wrong?
    Dr. Conway. So, for any individual case, we are happy to 
look into it with you and get back to you. I would go----
    Mr. Khanna. Do you know why that was denied?
    Dr. Conway. I would go back to our process, which was an 
independent Pharmacy and Therapeutics Committee----
    Mr. Khanna. Are you familiar with the process called 
utilization management?
    Dr. Conway. We have an independent Pharmacy and 
Therapeutics Committee, which has pharmacists and clinicians.
    Mr. Khanna. And what happened in Cassidy's case because of 
utilization management is the Committee went back to Cassidy's 
doctor and said, no, do not give her Humira, even though the 
disease is spreading to her rib cage and she is in pain for 6 
months because you need to try cheaper drugs first. Is that 
what utilization requires?
    Dr. Conway. So, the vast majority of medications are 
approved when prescribed.
    Mr. Khanna. That is not my question, but is there a policy 
that you require people to try out cheaper alternatives first 
and that the doctor is overruled, as happened in Cassidy's 
case?
    Dr. Conway. The vast majority of medicines are approved as 
prescribed. There are times when the independent P&T has 
recommended criteria that be followed, where at times one 
medicine is tried before another medicine.
    Mr. Khanna. And is cost part of the criteria?
    Dr. Conway. The criteria start with the clinical standards 
and the evidence.
    Mr. Khanna. Is cost one of the factors?
    Dr. Conway. No, the first criteria is the clinical evidence 
and criteria. If medicines are clinically equivalent, then the 
lower net cost can be considered.
    Mr. Khanna. So, cost is a factor, and there are times, as 
in Cassidy's case, that the doctor's clinical diagnosis is 
overruled because of cost. I mean, the doctor was begging for 
this to be approved for this girl for 6 months as arthritis 
spread from her knees and her ankles to her rib cage. And it 
was denied again and again because they were saying that the 
doctor needed to prescribe something cheaper. Do you believe 
that that was an outrageous decision to privilege costs over 
this girl's health?
    Dr. Conway. As a practicing pediatrician, and I have taken 
care of many children with juvenile arthritis, it is critically 
important to follow the clinical evidence to prescribe 
appropriately.
    Mr. Khanna. But why would you not just say it is critically 
important to follow the doctor's recommendation? Can you commit 
to that today, that Optum Rx in the future will not have cases 
like Cassidy, and if a doctor is prescribing a medicine like 
Humira, will agree to fill that prescription?
    Dr. Conway. For any individual case, for you or other 
Member of Congress, if you want us to look into that case, we 
will.
    Mr. Khanna. But can you make a commitment today that you 
will privilege the doctor's recommendation over the 
bureaucracy's recommendation? This is the heart of why people 
are so upset at the PBMs. Can you just make that commitment 
that you will not override a doctor's? How about this? Can you 
commit that if a doctor recommends it twice, you will not 
override it?
    Dr. Conway. As a physician, I hope you understand this, we 
value our partnership with physicians.
    Mr. Khanna. I am sure you value it, so then can you commit 
to taking their recommendation? Why would you not commit to 
taking their recommendation, or can you commit to not 
considering cost, taking cost out of your utilization?
    Dr. Conway. We are committed to the independent P&T 
Committee that we have that is transparent, that includes 
independent----
    Mr. Khanna. It is like lawyers are writing your statements.
    Dr. Conway. I am trying to answer your question, sir.
    Mr. Khanna. No, you are not, with due respect, sir. You are 
not committing to not having cost, and you are not committing 
to having a doctor's recommendation, even if they have it 
twice. If a doctor says, we need Humira, it is denied. Then the 
doctor says, we need Humira. You are not even committing to 
accepting that, and you are not committing today, and I will 
let you have the final word, and you are not committing to 
taking out cost as a consideration.
    Dr. Conway. We are committed to effective clinical care for 
all the people that we serve.
    Mr. Khanna. Well, that does not answer my question. My time 
has expired.
    Chairman Comer. The Chair now recognizes Mr. Grothman from 
Wisconsin.
    Mr. Grothman. OK. This is for any one of you. We are at the 
risk of a record number of pharmacy closures in 2024, which 
will only serve to make our pharmacy deserts worse. In fact, 
one-third of the independent pharmacies are currently at risk 
of going out of business. This is largely due to the PBMs which 
engage in patient steering and spread pricing, which charges 
employers more for medications than they reimburse pharmacies. 
With the role you play in prescription drug reimbursement, how 
can you sit here and say that PBMs are not a major cause of 
these closures, or do you agree it is a major cause of these 
closures?
    Dr. Kautzner. Thank you for the question, Congressman. My 
20 years of experience in this industry leads me to a different 
conclusion as with the data, which would show, today, we 
actually in the last 5 years have grown the number of 
independent pharmacies in our network from 18,000 to over 
21,000. Fourteen hundred net new independent pharmacies are in 
our network in the last year.
    Mr. Grothman. Your network, is that nationwide or just your 
network?
    Dr. Kautzner. Our total network is nationwide. It has over 
64,000 pharmacies in it, of which over 21,000 of them are 
independent pharmacies. We also increased reimbursement to over 
700 pharmacies across this country to address exactly what you 
just mentioned around underserved areas and rural and urban 
areas, so patients have access to care where they need it.
    Mr. Grothman. There is substantial evidence that PBMs often 
prioritize higher rebate medications over cheaper alternatives, 
which directly drives up the cost of patients. How do you 
justify these practices that seem to place profits over 
affordability, and what specific actions will you take to stop 
exploiting patients with unnecessary high drug prices? Could 
you comment on that?
    Dr. Kautzner. So, we fight every day to keep drug prices 
down. There are challenges with very high-cost branded 
products. There are new products that entered the market. Last 
year, unfortunately, had a median cost of $300,000 annually, so 
our focus is to bring down those costs. Some considerations 
that we are working through and we applaud Congress for doing 
is, one, reducing the patent thickets that 80 percent of the 
top 100 branded drugs put in place so they have monopolies on 
those drugs for much longer. That is a focus. Two is to make 
the biosimilar interchangeability pathway much easier so 
physicians do not have to get a new prescription for those 
drugs and you can enter biosimilar competition much sooner. As 
my example earlier this morning on Humira, the primary patent 
expired in 2016. They kept biosimilar competition from entering 
the market until 2023. When it did, the price and that cost 
came down 38 percent.
    Mr. Grothman. Amen, brother. Do you think the American 
system of researching drugs is, to a degree, broken, not enough 
emphasis on biosimilars, not enough emphasis, I guess I will 
say, on drugs that make the pharmaceuticals more money? Do you 
think that is true?
    Dr. Kautzner. I think, as Representative Timmons mentioned, 
there is less of a focus now on some of the larger chronic 
disease states that so many Americans, unfortunately, have, and 
there is much more of a focus in drug manufacturers on very 
rare conditions. Some of those conditions they move to for 
ultra-rare, ultra-orphan type products because there is less 
competition, and they will have a monopoly on those drugs for 
much longer, which will increase their profits.
    Mr. Grothman. But in general, research overall, including 
university research, are they too focused on, I guess because 
the government pays for a lot of that research, are they too 
focused on or not focused enough on biosimilars, not focused 
enough on generics, not focused enough on things that may be 
cheaper and instead are spending the research dollars, 
including at the universities, on things that are going to 
result in higher costs?
    Dr. Kautzner. From my view and my experience, there are 
times where there is not enough competition in certain cases, 
and competition is where we drive savings in this competitive 
market. So, whether it is biosimilars or generics and the lack 
of, those competitive products in those areas, yes, that 
becomes an issue in certain conditions.
    Mr. Grothman. Do you feel that some of that is the 
university's fault, or is it the government who is telling them 
where you have to put your research dollars?
    Dr. Kautzner. That question is probably outside of my scope 
of expertise. We would have to get back to you on that piece.
    Mr. Grothman. OK.
    Mr. Grothman. I guess that takes up my time.
    Chairman Comer. The gentleman yields back. The Chair now 
recognizes Mr. Mfume from Maryland.
    Mr. Mfume. Thank you very much, Mr. Chairman. My thanks to 
both you and the Ranking Member for convening us for a third 
time to talk about PBMs and to allow us the opportunity, in 
this case, to have the three major players before us. I would 
like to, before I begin, recognize a group of retail 
pharmacists from my state of Maryland who are here and who have 
been very helpful with me and others in terms of helping us to 
understand their plight. They are seated in the audience here.
    And I would ask, Mr. Chairman, unanimous consent to enter 
into the record their letter in support of continued bipartisan 
scrutiny of pharmacy benefit managers.
    Chairman Comer. Without objection, so ordered.
    Mr. Mfume. Mr. Chairman, I would also ask unanimous consent 
to enter into the record the American Federation of State, 
County, and Municipal Employees' letter advocating for 
increased transparency for PBMs.
    Chairman Comer. Without objection, so ordered.
    Mr. Mfume. Thank you, sir, and I will pass those down and 
we will get those right to you.
    According to the Kaiser Family Foundation, last year, in 
2023, 30 percent of Americans reported that they were unable to 
take their prescribed medication as needed due to exceedingly 
high costs. That is not me. That is 30 percent of the people in 
this country who were asked. In fact, my office has met with 
the Asthma and Allergy Network recently who conveyed that many 
parents in my district in Baltimore, as I am sure is the case 
in other districts around the Nation, are forced to forego 
their own medical needs to ensure that they themselves as 
parents are able to afford the ability to purchase medications 
like inhalers and EpiPens for their children who are in pain 
and who suffer and who need that sort of treatment and those 
sort of medications and other things. In addition, some of 
those families have multiple children, and in those instances 
those children who have the same ailments must share the same 
inhalers, EpiPens, or other things that are prescribed. 
Gentlemen, I do not know about my colleagues here, but I find 
this absolutely unacceptable, and I think, Mr. Chairman, that 
we have got to find some sort of bipartisan path to bring about 
regulation. Otherwise, we will be faced with the possibility of 
having a fourth hearing.
    Hubert Humphrey said something that bears repeating. He 
said that the moral test of government is how that government 
treats those who are in the dawn of life, how they treat those 
who are in the twilight of life, and how that government treats 
those, like the elderly and others, who are in the shadows of 
life. We are not doing a good job when it comes to prescribed 
medications because what we are doing is to push them further 
into those shadows. Now, I know that I could be a band of one 
on this, but I am never going to stop banging this drum because 
people are hurting.
    And I just do not understand, to the three of you who are 
here, how is it that you are right and the Federal Trade 
Commission is wrong. Help me to understand how you are right, 
and the attorney generals of eight states, and it could be nine 
as of today, are wrong. Please tell me how the analysis done by 
major media outlets, like the New York Times and others, 
underscore this problem, but they are wrong, and please tell me 
how pharmacists and doctors say that you are the problem and 
you say they are not. So, I think this begs for an approach 
that is bipartisan and one that finds a way to correct this 
issue. Quite frankly, I am tired of running around and playing 
Ring Around the Rosie.
    Now, I am not saying you should not have any sort of profit 
margin, but I think those margins are exorbitant. I have yet to 
see the formulas. Even though you say you are transparent, I do 
not know what formulas you use to come up with the pricing. You 
know, is it sleight of hand? Is it now you see me, now you do 
not? This is crazy. This is absolutely crazy, and I would go so 
far to say it is anti-American. And for my colleague who said 
earlier that 90 percent of all of this can be corrected, that 
it is preventable, there are cases of obesity that are genetic. 
There are cases of cancer that go back to genetic disposition. 
I could name a ton of other diseases that you cannot prevent 
that are not a part of this so-called 90, and these people need 
help. They need to be able to purchase the medications they 
need without a lot of sleight of hand. So, I have yet to see 
the transparency, with all due respect.
    My time is concluding, but, Mr. Chairman, I would welcome 
any opportunity that you and the Ranking Member put together 
that we might be able to find a way to address this problem 
once and for all for Americans all over the United States. I 
yield back.
    Chairman Comer. The gentleman yields back, and I agree. Mr. 
Mfume, I look forward to working with you. I will remind, we 
passed a PBM piece of legislation that impacted the Federal 
Employee Health Plan that came through this Committee. That was 
our sole jurisdiction on it, but we are going to continue to 
work together, and I pledge to work with you in that endeavor 
in a bipartisan way. The Chair now recognizes Mr. Burlison from 
Missouri.
    Mr. Burlison. Good afternoon. I guess I am part of a dying 
breed. I am still a free-market, believe-in-capitalism 
Republican, which is apparently rare in this town. I happen to 
agree wholeheartedly with my associate, Mr. Timmons, that we 
have dramatically removed all costs in any kind of, you know, 
decisionmaking from patients all through the regulatory schemes 
that originated here in Congress. And so, we further continue 
to try to remove any kind of negotiating power, and then we 
wonder why healthcare costs just continue to skyrocket year 
after year, and yet we have this one example where healthcare 
costs are not. Yet it seems, just from hearing this, you know, 
what I have heard today, you guys are forcing yourselves on 
your customers. Do you literally put a gun to the head of the 
businesses that hire you, that pay you, Mr. Joyner?
    Mr. Joyner. Not at all. In fact, they hire us to do a very 
specific job and, as we said earlier, very high satisfaction 
rates.
    Mr. Burlison. And if they are not happy, they do not have 
to continue to pay you, right?
    Mr. Joyner. Exactly. They have choices and options.
    Mr. Burlison. So, if they are not happy, if the price is 
too high, just like in the normal market, they can choose 
someone else. There are apparently 70 different options, and 
yet we are here wanting to dig deep into your pricing 
structure, get involved in your profits. That is what is 
remarkable to me.
    Now, look, I do have concerns about my independent retail 
pharmacies, and I was pleased to hear that you guys are 
engaging with them. I am going to get to that question next. 
Let me ask this, and I think this will be telling. Big Pharma, 
pharmaceutical companies, they obviously do not like you, 
right? You guys negotiate down pricing, but do they utilize 
you, Mr. Kautzner? Pharmaceutical companies have employees, and 
this will be very telling. Do they use pharmacy benefit 
managers to manage the insurance costs of their own employees?
    Dr. Kautzner. Congressman, yes, we do have clients who are 
pharmaceutical manufacturers.
    Mr. Burlison. Why in the world would they choose? 
Obviously, you are forcing yourself on them. You are forcing 
yourself for them to purchase your services, right? The 
services that they say are so egregious, and yet they choose to 
purchase, to hire one of you to manage their own employees' 
costs. I think that that is evidence enough, but I want to get 
to what can we actually do to reduce the costs of 
pharmaceuticals for patients, and I am trying to be creative. 
What this place does is just add more regulations, try to get 
into the lives and the businesses as much as possible. What 
regulations could we look at that would actually empower 
independent pharmacists and hopefully provide better access to 
patients? And I would like to hear from each of you.
    Mr. Joyner. So, Congressman, I think our track record 
speaks for itself, which you mentioned earlier. The PBM 
industry, specifically CVS Caremark, has been very successful 
in creating competition to lower costs for our customers, and 
if you look at the generic medication adoption rate, it is 9 
out of every 10 prescriptions is a low-cost generic. The 
remaining 10 that are brands, we use competition to effectively 
lower the overall cost. So, between 2017 and 2022, we were 
successful in lowering the brand medications by 15 percent. So, 
I do think that the PBM model does work in terms of creating 
competition and lowering cost.
    I will add on that I think what the concern here is the 
out-of-pocket cost for the members. In large part, that is what 
we have delivered and introduced a new pricing model called 
TrueCost because the idea now is to make sure that the member 
gets exposed to the lowest net cost. In fact, what the pricing 
model is inherently designed to do is make sure that it gets 
closer to the acquisition cost, making it simple and easy for 
the patient to access the medication.
    Dr. Kautzner. So, Congressman, in regard to independent 
pharmacies, you are from Missouri. I live in Missouri. There 
are, unfortunately, 20 percent of Americans living in rural 
America today and only 10 percent of America's physicians live 
there. That creates an access-to-care challenge. Independent 
pharmacies can help fill that challenge by allowing them to 
work at the top of their license, expanding scope of practice 
opportunity----
    Mr. Burlison. I a hundred percent agree.
    Dr. Kautzner [continuing]. So that they have those 
opportunities and they can get to the patients that need them 
most. When I was a kid, I used to go to an independent pharmacy 
because it was hard to get into a doctor at the time. It is 
that type of work that we need to work together on and partner 
to be able to do, and that will have a real effect in 
communities.
    Chairman Comer. Oh, I am sorry. Go ahead and answer the 
question.
    Dr. Conway. I will be very brief, given the time. We agree 
with your points that transparency, choice, and a competitive 
market serve our customers. They value that choice, as we 
described, and we continue to drive both affordability 
initiatives to consumers and support for independent 
pharmacies.
    Mr. Burlison. I really appreciate your comments, and I 
wholeheartedly agree. I am going to be pursuing an effort to 
try to reevaluate what pharmacists are allowed to do to try to 
increase their scope because at the end of the day, we need 
more healthcare providers, we need better access to healthcare, 
and we need to improve their ability to get reimbursed, and I 
think this may be a win-win. Thank you.
    Chairman Comer. The gentleman yields back. The Chair now 
recognizes Ms. Norton from Washington, DC.
    Ms. Norton. Thank you, Mr. Chairman. Today we are here for 
yet another hearing on a very important topic that Democrats 
have long worked to address: high drug prices. The high cost of 
healthcare is a burden on individuals and families in the 
United States. Prescription drugs are too expensive across the 
board. A 2023 polling by the Kaiser Family Foundation found 
that 3 out of 10 Americans have not taken their medicine as 
prescribed because of high costs. A 2023 report from Patients 
for Affordable Drugs found that for certain cancer medications, 
some patients spend up to $16,500 out of pocket. I would like 
to ask each of our witnesses today, Dr. Kautzner, yes or no, do 
you agree that we need to do more to lower the price of 
medicines for people across the country? Yes or no.
    Dr. Kautzner. Congresswoman, there is always more that we 
can do to lower patient out-of-pocket costs, and we would 
certainly be happy to offer some recommendations on how we and 
Congress can do that.
    Ms. Norton. Mr. Joyner, do you agree that we need to do 
more to lower the price of medicine for people across the 
country?
    Mr. Joyner. Congresswoman, I agree, and that is the role of 
the PBM, is to continue to create competition to lower costs 
for the customers on which we serve.
    Ms. Norton. Thank you. Mr. Conway, do you agree that we 
need to do more to lower the price of medicine for people 
across the country?
    Dr. Conway. Yes. We need to do more to make medicine more 
affordable for the people across the country, and that is what 
we work on each and every day.
    Ms. Norton. I appreciate that because it seems pharmacy 
benefit managers are a factor in these unacceptable high costs. 
An interim report published by the Federal Trade Commission 
this month and a New York Times article in June found that 
pharmacy benefit managers contribute to rising out-of-pocket 
drug costs, including by steering patients away from cheaper 
medications like generics. The bottom line is that high costs 
are harming Americans.
    Fortunately, the Democratic-led Inflation Reduction Act 
that President Biden signed into law in 2022 is already 
addressing these high costs. The Inflation Reduction Act caps 
the amount someone on Medicare has to pay out-of-pocket for 
insulin at $35 per month. This is estimated to save $500 per 
person per year. Capping the cost of insulin so everyone who 
keeps it can afford it will save lives. Nearly 7 million 
Americans rely on daily insulin, about 4 million of whom will 
directly benefit from the $35 Medicare limit set by the 
Inflation Reduction Act. The Biden-Harris Administration is 
working to expand the $35 insulin cap to all Americans. Already 
several insulin manufacturers, including the largest 
manufacturer, Eli Lilly, have committed to lowering the cost of 
insulin by 70 percent and capping out-of-pocket costs at $35 
per patient, not just those on Medicare.
    The Inflation Reduction Act also limits out-of-pocket costs 
for patients covered by Medicaid Part D to $2,000 per person 
beginning in 2025. Patients for Affordable Drugs has found that 
99 percent of cancer patients who use brand medications will 
benefit from the Inflation Reduction Act's $2,000 cap on out-
of-pocket costs. This is estimated to create annual savings at 
$7,590 for those patients. Overall, the Inflation Reduction Act 
will improve lives for over 1.4 million Americans covered by 
Medicare. It will also lead to an estimated $7.4 million in 
savings in annual out-of-pocket costs for enrollees. The 
Inflation Reduction Act has and will continue to benefit 
Americans who face burdensome high-cost prescription drugs.
    I hope the pharmacy benefit managers here today will commit 
to actions that similarly benefit American families by reducing 
the cost of medications and increasing patient choice and 
access to medication. Thank you, Mr. Chairman, and I yield 
back.
    Chairman Comer. The gentlelady yields back. The Chair now 
recognizes Mr. Fallon from Texas.
    Mr. Fallon. Thank you, Mr. Chairman. We all know that the 
cost of healthcare has steadily increased, and it is in an 
environment of already record-breaking inflation. More and more 
Americans are forgoing healthcare coverage because they simply 
cannot afford it. PBMs state that they exist to save people 
money, yet the PBMs are seeing, quite frankly right now, sky-
high profits and healthcare costs are becoming prohibitively 
expensive for the average American. According to the Federal 
Trade Commission, three PBMs now control 80 percent of the 
market. They have vertically integrated with suppliers of goods 
and services, retail, mail-order, especially pharmacies and 
large health insurers. As a result of vertical integration, 
there are pharmacies owned by the same company as the PBM that 
are linked to, ``affiliated pharmacies'', as well as local and 
independent pharmacies, which are known as unaffiliated 
pharmacies.
    Each one of you here today represents a group that is 
integrated, insurer, PBM, pharmacies and provider services 
together. So, for the witnesses here, Mr. Conway, Joyner, and 
Kautzner, what is your relationship with your respective 
companies with independent and unaffiliated pharmacies? Would 
you describe it as positive or negative? Mr. Joyner, is it 
positive or negative because, I apologize, we have limited 
time.
    Mr. Joyner. No, I am just saying, Congressman, I think 
independent pharmacies are a critical part of our network.
    Mr. Fallon. So, you would say you would describe your 
relationship with them as positive?
    Mr. Joyner. I would, and we also reimburse them more money, 
so I think that is one of the benefits of a relationship.
    Mr. Fallon. And Dr. Kautzner?
    Dr. Kautzner. Congressman, we have worked hard very 
recently to make it a positive interaction with independent 
pharmacists.
    Mr. Fallon. And Dr. Conway?
    Dr. Conway. The goal is also positive and support 
independent pharmacies and pharmacists.
    Mr. Fallon. OK. And the same thing I would like to start 
with, Mr. Joyner, do your companies steer patients to 
affiliated pharmacies? Yes or no.
    Mr. Joyner. We actually establish a variety of different 
network options.
    Mr. Fallon. And again, at limited time, yes or no?
    Mr. Joyner. So, the answer is no.
    Mr. Fallon. OK. Dr. Kautzner?
    Dr. Kautzner. No, sir. Our clients make the decision on 
what pharmacy networks they want to use for their patients.
    Mr. Fallon. Dr. Conway?
    Dr. Conway. No.
    Mr. Fallon. Well, it is interesting because there is a 71-
page report here from the FDC, a study found that from internal 
documents and public comments, that not only do PBMs reimburse 
their affiliate pharmacies at significantly higher costs than 
affiliated, but it also shows that PBMs use a number of tools 
to steer patients to their affiliated pharmacies, even when the 
cost is higher to the patient. And when discussing that matter, 
documents also show that they are more concerned about the 
optics of a patient paying thousands of dollars more than the 
actual patient paying thousands of dollars more. You have an 
independent pharmacists coming into our office, in Congress, 
repeatedly, and they say they feel they are forced into using 
PBMs. So, I am assuming that you all know what a passive 
contract is. Mr. Joyner, do you know what a passive contract 
is?
    Mr. Joyner. It would be helpful if you could describe it.
    Mr. Fallon. OK. A passive contract is when a PBM sends a 
proposed contract to a pharmacy, for example, by fax, with a 
clause in it that says the pharmacy is in unless they opt out, 
and then they are automatically signed into the contract with 
the PBM. There may not even be confirmation that the proposed 
contract was received. Now, I find that to be unethical, but 
the FTC study showed that passive contracts make up a large 
percentage of the contracts sent out by the PBMs. So, that is 
what I would say a passive contract is.
    Mr. Joyner. Yes.
    Mr. Fallon. OK. Dr. Kautzner?
    Dr. Kautzner. Sir, you are asking am I aware of what a 
passive contract is, just to confirm?
    Mr. Fallon. Yes.
    Dr. Kautzner. Yes. Yes.
    Mr. Fallon. So, you are aware. Dr. Conway?
    Dr. Conway. Yes, I am aware of that term.
    Mr. Fallon. OK. Dr. Conway, have you all done this, where 
you are sending out unsolicited communications to pharmacies 
and saying if you do not respond, you are opted in, unless you 
opt out?
    Dr. Conway. We do not participate in that type of 
contracting, and our independent pharmacy network has grown 
over the last several years. And we pay them more than retail 
pharmacies and actually pay non-affiliated pharmacies, on 
average, comparable or more than our affiliated pharmacies.
    Mr. Fallon. So, would you say whether a pharmacy is owned 
by the same company as the PBM, is that a factor in determining 
reimbursement rates?
    Dr. Conway. No. We pay affiliated and non-affiliated 
pharmacies comparable rates. Often our own affiliated 
pharmacies are actually the lowest cost options in the market, 
and at the end of the day, as described, the clients, 
employers, and others select the network that they want to 
provide to their employees.
    Mr. Fallon. I wish I had more time. Mr. Chairman, I yield 
back.
    Chairman Comer. Thank you. The gentleman yields back, and 
before I yield to Ms. Brown, just want to remind the witnesses, 
you are under oath. And the statement about having a good 
relationship with pharmacists, with independent pharmacists, 
that is a bit of a stretch according to dozens of pharmacists 
that have texted my phone when you all said that. So, just want 
to remind everyone, you are in the crowd, obviously. Just 
remind you, you are under oath, and the witness that testified 
yesterday, things did not turn out well for her over the past 
24 hours. This is a serious issue. There is clearly a problem 
with the independent pharmacies and the PBM, and to 
characterize it that you have a great relationship, I believe, 
is a stretch. That is my opinion, but the Chair recognizes Ms. 
Brown from Ohio.
    Ms. Brown. Thank you, Mr. Chairman, and thank you for 
reminding our witnesses they are under oath.
    Our three witnesses, the executives of top three pharmacy 
benefit managers, control 80 percent of the market share in the 
industry. Eighty percent. Over 270 million Americans have their 
drug prices in some way controlled or affected by these three 
companies sitting before us today. And yet, these companies 
have failed to communicate as to how they are working to lower 
the cost of prescription drugs, pass along savings to patients, 
and protect local and independent pharmacies. Members of 
Congress from both parties have expressed concerns about PBMs 
dictating requirements to local, independent, and small 
pharmacies, compelling them into your networks, and to accept 
the terms or be excluded from this crucial market. 
Unfortunately, many pharmacies cite untenable contract terms 
from PBMs as part of the reason they must close.
    Experts project nearly one-third of all independent 
pharmacies will be forced to close by the end of this calendar 
year. And approximately 2,200 retail pharmacies closed their 
doors in the last 4 years, many of which are in low-income or 
rural parts of the country where access is already a major 
issue. So, I just want to get some clarity. If you do not agree 
that consolidation among the pharmaceutical industry is a key 
factor toward these closures, then in your opinion, what is the 
cause? Any of you can feel free to jump in.
    Dr. Kautzner. So, Congresswoman, the data that I have shows 
a bit different of a picture around independent pharmacies and 
independent pharmacists. And our data would show that in the 
last 5 years, within our own network--I cannot speak to 
others--that we have actually seen a net increase of about 20 
percent of independent pharmacies open, net increase, and in 
the last year, 1,400 net increase.
    Ms. Brown. Anyone else care to dispute this accusation 
claim with alternative facts, perhaps?
    [No response.]
    Ms. Brown. Well, thank you. Would you share the same 
insight as it relates to local pharmacies rather than 
independent pharmacies?
    Dr. Kautzner. So, I would characterize independent and 
local as being similar. So, we only track independent 
pharmacies, of which they make up one-third of our pharmacy 
network and account for over 21,000 pharmacies across the 
country.
    Ms. Brown. Similar but not the same. Reclaiming my time. 
Thank you. Many people, especially in vulnerable populations, 
rely on local and independent pharmacies, similar but not the 
same, for their medications and important health services. 
However, PBMs are forcing more and more people to specialty 
pharmacies or mail-order pharmacies, which are owned by the 
same parent company as PBMs. As one example, PBMs can tell 
patients they can only receive an extended supply of their 
medication if they go to a specific pharmacy owned by the same 
parent company as the PBM, generating even greater profit for 
these giant pharma corporations. So, I am just going to 
dovetail into what my colleague talked about on the other side 
of the aisle. How do you respond to the accusations that you 
are steering patients to pharmacies owned by your parent 
companies? Hello?
    Dr. Conway. So, we have over 26,000 independent local 
pharmacies in our network. The reimbursement rate, the volume 
of prescriptions has gone up over time, the number of 
pharmacies have gone up over time, and agree with you on the 
importance of these pharmacies.
    Ms. Brown. Anyone else with an actual answer?
    Dr. Kautzner. So, one, we do not steer. Our clients make 
the decision on which pharmacies they decide to put into their 
network, and our data would show that in the last year, mass 
retailers saw a 6 percent increase in pharmacy prescriptions. 
In the last 5 years, grocers saw an increase of 23 percent, 
while in the last year, our home delivery pharmacy had a 
relatively flat volume.
    Ms. Brown. Thank you. I would again reiterate what our 
Chairman talked about at the top of my remarks, is how critical 
this issue is and how important it is for you to be truthful, 
because Americans deserve an affordable and accessible 
healthcare. When a local pharmacy closes its doors, residents 
lose access to the pharmacy they know well. And when the only 
pharmacy in a community closes, patients are forced to travel 
further to get medications they need, potentially delaying 
their treatment and care. It is unacceptable to me that PBM 
practices would harm communities in this way. And with that, 
Mr. Chairman, I yield back. Thank you for indulging me.
    Chairman Comer. The gentlelady yields back. The Chair now 
recognize Mr. Fry from South Carolina.
    Mr. Fry. Thank you, Mr. Chairman. I think Oversight is 
turning over a new leaf in two hearings in 2 days and wide 
bipartisan support. What do you think about that, Mr. Raskin? I 
think it is good.
    You know, it is interesting. For years, PBMs have quietly 
assumed control of a major facet of America's pharmaceutical 
industry through vertical integration and consolidation and 
methods like spread pricing. Major PBMs have been able to take 
control of prescription drug access, leaving little room for 
transparency in an industry where the sole mission should be to 
provide essential and lifesaving pharmaceuticals to patients. 
This sort of control has caused an almost irreversible strain 
on America's independent pharmacies. One is in my district, one 
is in the Ranking Member's district, one is in the Chairman's 
district, and all across this country.
    An illustration of that fact, the National Community 
Pharmacists Association, which represents over 19,000 
pharmacies, cites that we can expect one pharmacy closure each 
day in the United States. I have heard from pharmacies within 
my district that it is cost-prohibitive to obtain the drugs and 
dispense them, and so they just choose not to. That they make 
their money or their profit on other things that they sell, 
like milkshakes or T-shirts or whatever it is, in their 
particular pharmacy is kind of alarming.
    So, for me, I think we start at the beginning. To what 
extent, you each that are here today, you each have lawyers on 
your team that review contracts--is that correct--and draft 
contract language. Is that correct? Yes or no.
    Mr. Joyner. Correct.
    Dr. Conway. Yes.
    Dr. Kautzner. Yes.
    Mr. Fry. How much opportunity exists for a small mom-and-
pop pharmacy in a rural area to negotiate their own contract? 
Is it a boilerplate contract? Do they have any negotiating room 
at all? Say I own my own pharmacy.
    Dr. Kautzner. We are always open, Congressman, to 
negotiating with pharmacies.
    Mr. Fry. How does that look?
    Dr. Kautzner. Pharmacies can always redline a contract back 
to us and negotiate.
    Mr. Fry. Do they? Do they?
    Dr. Kautzner. They do.
    Mr. Fry. How often?
    Dr. Kautzner. I do not know----
    Mr. Fry. How often do you actually negotiate with them?
    Dr. Kautzner. As I said, I do not know an exact percentage. 
We have over 64,000 pharmacies in our network today, so it is a 
broad number, and there is a lot of volume that goes through.
    Mr. Fry. OK. I mean, just to guess, would you say it is 20 
percent of the time?
    Dr. Kautzner. I would not want to speculate, sir. We could 
get back to you.
    Mr. Fry. I actually do not believe you, and I am curious. 
If you have information on that, I would love to see it. I do 
not think that they actually have any negotiating power 
whatsoever. That is what we have heard. There is a wide gulf 
right now between what you are saying and what I have heard 
privately, so what is the disparity there?
    Dr. Kautzner. Congressman, we are happy to engage and do 
engage with independent pharmacies. We have, through the new 
initiative that we kicked off last year, it engages with over 
three dozen independent pharmacy owners that we convene. We 
meet with them on how we can work better together. We have had 
productive discussions in those meetings and are finding paths 
forward. It is around improving patient access to care and 
around providing additional services in those underserved 
communities in urban and rural areas. That is what we are 
focused on right now and then improving reimbursement in some 
areas where access to care is really important. And we have 
done that for over 700 independent pharmacies across this 
country.
    Mr. Fry. What exactly is the goal with community pharmacy 
contracts that contain rates and terms that you know are below 
acquisition costs of the pharmacies? And these, in my opinion, 
unacceptable contracts, are they intended to force out 
competition? What is the goal of that? We have heard that a lot 
from independent pharmacies.
    Dr. Kautzner. Sir, we are not focused on putting pharmacies 
out of business at all, and as I have said, our data actually 
is very different. We have had a net increase of 1,400 
independent pharmacies in our network in the last year alone. 
So, we are continuing to work hard with them to find those 
paths forward for patients to have broad access to care, 
whether it is an independent pharmacy, a grocer, or some other 
type of mass retailer.
    Mr. Fry. What about the other two on this panel that have 
been pretty quiet? What do you have to say about that, that 
pharmacists are at a competitive disadvantage and that often 
receive the rates and terms or below what the acquisition cost 
is?
    Mr. Joyner. Yes. Congressman, we have more than 27,000 
pharmacies. That effectively equals 40 percent of our network 
are independent pharmacies today. As we have said earlier in 
the testimony, we do reimburse these pharmacies at a much 
higher rate. In fact, upwards of 25 percent more for generics. 
If you were to apply that just across our commercial book, we 
have effectively paid independent pharmacies $340 million more 
than the equivalent chain pharmacies.
    Mr. Fry. Mr. Conway?
    Dr. Conway. We also have a similar number of independent 
local pharmacies, and, also, the volume of prescriptions and 
pharmacies in the network has continued to go up over time. We 
also have programs where we will pay them for particular 
services as options.
    Mr. Fry. I am going to wrap up here, Mr. Chairman, just for 
1 second. In our first hearing, we heard about TRICARE, 
reimbursement of a medical facility or a pharmacy right outside 
of a base, and that it was cost prohibitive for them to care 
for our Nation's men and women in uniform. And so, part of this 
was because the cost did not justify keeping or continuing to 
serve that population. So, I would invite you, that you are all 
here--you have heard the bipartisan support here--that you all 
need to do more to work with these independent pharmacies 
because they are closing at a rapid rate, and they are getting 
sucker-punched every single day because of competitive 
disadvantages that you all place in the marketplace. Thank you.
    Chairman Comer. The gentleman's time has expired. The Chair 
recognizes Ms. Stansbury from New Mexico.
    Ms. Stansbury. Thank you, Mr. Chairman. Gentlemen, thank 
you so much for being here today. I know you have taken a 
beating already for many hours this morning. I am not a 
healthcare policy specialist. I am not a prescription drug 
specialist. I am just a New Mexican. What I know is our 
healthcare system is terribly broken. In New Mexico, we have 
families that still do not have access to healthcare, people 
who are waiting in waiting rooms at hospitals who cannot get 
emergency care. We have people who still do not have health 
insurance in spite of the expansions that we have had through 
the Inflation Reduction Act and, of course, the Affordable Care 
Act. And we still have people who are dying of unnecessary 
diseases because they cannot afford lifesaving care and 
prescription drugs.
    So, for me, this is really about the humanity of our health 
policy, and that is why I believe healthcare is a human right. 
And that is why I believe and support holistic and systemic 
reforms to our healthcare system because we should not have to 
have hearings like the hearing we are having here today. It 
should not be so complicated that, you know, one of our 
grandparents cannot afford to get the lifesaving medication 
that will keep them alive and healthy for the coming years. And 
it should not have to come to the reality that we have private 
for-profit companies who have figured out how to game the 
system so that they can generate profits while providing some 
sort of service for their clients at the expense of our 
communities.
    So, you know, Dr. Conway, we had the opportunity to meet 
yesterday in my office, and I really did appreciate you 
stopping by. And one of the comments that you made in the 
conversation that we had is that, well, the prescription drug 
companies need to lower their costs. You know, the middlemen 
are just sort of taking advantage of the system as it exists. 
You did not say that. I said that. But I think what this 
hearing really points to is a bigger problem, a sickness in our 
healthcare system, and the fact that private for-profit 
companies are able to profit at the expense of our communities, 
even if you are providing a service within that ecosystem.
    And a lot of my colleagues today have alluded to the 
Inflation Reduction Act, and I just want to emphasize that part 
of why it was so significant is it was one of the first times 
that we passed Federal legislation that enabled our Federal 
healthcare provider networks to negotiate prescription drug 
costs, just like you do as middlemen for your clients, so that 
our seniors could actually access affordable prescription 
drugs. And we know it is going to save people money, we know it 
is going to save lives, but there are still millions of 
Americans who cannot afford medication. And I understand that 
these PBMs provide rebates. My mother was in the hospital a 
year ago, and when she was being discharged, she was told that 
the medication she needed for her heart condition was going to 
cost $400 a day. She was given a rebate.
    I think in these kind of policy discussions, the humanity 
gets lost, and, you know, these companies are taking advantage 
of a system that is not set up for our communities. So, I think 
the one question that I would ask of each of you is just a very 
simple question, which is, do you believe that our system needs 
systemic reform? Do you believe that drug prices should be 
reduced, and would you support that, and would your company 
support that, even if it meant that you could not benefit and 
profit off of it? And why do we not start with Mr. Joyner?
    Mr. Joyner. Congresswoman, thanks for your comments, and I 
completely agree with you. I retired at the end of 2019, and I 
came back a year and a half ago for the very specific reason 
that you mentioned, which is I want to be a part of changing 
the healthcare system in this country. In large part, we have 
been successful in doing, at least within the last year, we 
introduced a biosimilar into the market with a low list price--
--
    Ms. Stansbury. Thank you----
    Mr. Joyner [continuing]. Delivered savings to the members 
at zero out of pocket and 50-percent cost reductions for our 
employers. So, I think we are making headway, and especially 
with the new price model, to solve exactly what you are 
referencing.
    Ms. Stansbury. Thank you. Dr. Kautzner?
    Dr. Kautzner. Congresswoman, there is always more that we 
can do, and you do point out some challenges that our 
healthcare system certainly has. We believe within the 
commercial market, we can move swiftly to be able to make 
lower-cost products available to patients. Certainly, there is 
always more that can be done.
    Ms. Stansbury. Thank you, Dr. Kautzner. Dr. Conway?
    Dr. Conway. First, I appreciated the meeting yesterday. We 
at UnitedHealth Group do think the health system needs to 
perform better for everyone. And as I said yesterday, we 
believe list prices of pharmaceuticals as set by manufacturers 
should come down in the United States.
    Ms. Stansbury. Thank you. And I did not mean to interject, 
gentlemen, but this is not a hearing for advertising your 
companies. This is really about addressing the healthcare 
crisis that our communities are facing, and I appreciate the 
role that you are playing, but we have got to reform the system 
because there are people dying in this country who should not 
be because they cannot access medicine. And with that, I yield 
back.
    Chairman Comer. The Chair now recognizes Mr. Langworthy 
from New York.
    Mr. Langworthy. Thank you very much, Mr. Chairman. I really 
appreciate you bringing this hearing forward, and I thank you 
all for being here today to discuss this important topic for 
Americans of all ages and across all communities.
    Employers, unions, and even state governments that sponsor 
self-insured health plans for their workers are considered 
fiduciaries under Federal law. They must make decisions that 
keep health plan cost low and that are in the best interests of 
patients. Now, currently, PBMs are not held to the same 
standard that applies to plan sponsors, despite essentially 
standing in the shoes of the plan sponsor when performing 
pharmacy benefit plan design and management services on their 
behalf. As a result, PBMs continue to charge unreasonable and 
excessive fees, steer plan participants to higher-costing 
prescription drugs, and pocket rebates and discounts that 
should belong to the plan. These actions are not in the best 
interest of participants, and are not what the plan sponsors 
would do, much less could do, given their fiduciary duty to the 
plan.
    Mr. Joyner, can you tell me why you think PBMs should not 
be a fiduciary?
    Mr. Joyner. Congressman, the role of the PBM is to serve 
the customer or the clients that are managing the pharmacy 
benefits, so we do not have control over the benefit design 
that actually passes through to the member.
    Mr. Langworthy. So, it sounds like PBMs do not want to 
help. They do not want to be plan fiduciaries because there are 
certain things that they do or want to do which fiduciaries 
would not be permitted to do. Can you give me some examples in 
ways in which PBMs' hands might be tied if they were a plan 
fiduciary?
    Mr. Joyner. A good example, and I will use the new price 
model that we are rolling out. Today, we pass through 99-plus 
percent of the rebates to our customers. And our customers then 
determine how best to use those discounts in terms of reducing 
either the premiums and/or reducing the other costs of the 
drugs. In TrueCost, we are looking to incorporate those 
discounts so that it passes through to the actual member in 
getting the client alignment so that it actually aligns both 
the client and the employee experience.
    Mr. Langworthy. Do you think that PBMs are making decisions 
that help keep plan costs low, or are they helping plan 
sponsors be good stewards of benefits?
    Mr. Joyner. Our first goal is to reduce and manage the 
overall cost of pharmacy, and then, ultimately, that allows our 
customers to become good stewards of their benefits.
    Mr. Joyner. What about when Johnson & Johnson's PBM charged 
patients over $10,000 for a $28 drug?
    Mr. Joyner. I am not familiar with that.
    Mr. Langworthy. How about when PBMs refuse to give patients 
access to much cheaper alternatives to expensive drugs like 
Humira?
    Mr. Joyner. So, Congressman, using the Humira example, we 
actually took Humira off of our formulary in April of this 
year. We converted 97 percent of the medications into a lower-
cost biosimilar. Our clients' plan sponsors saved $500 million 
as a result of that change, 50 percent reduction off of what 
they were spending in 2022, and, importantly, the employees, 
for the most part, paid zero dollars out of pocket for that 
biosimilar.
    Mr. Langworthy. So, it sounds like PBMs believe that they 
are currently doing their best to keep costs low and act in the 
interest of the patient. If that is the case, you are already 
complying with fiduciary standards. So, why are PBMs so dead 
set against being fiduciaries?
    Mr. Joyner. Again, as I mentioned, we do not have control 
over the benefit design. The clients, the employers, which is 
an employer-funded healthcare system, they determine how they 
are going to ask members to participate from a premium or 
contribution and ultimately designing the out-of-pocket cost 
for their employees. We facilitate that, but we do not make the 
decisions on behalf of our customer.
    Mr. Langworthy. Will your company commit to supporting 
fiduciary standards for PBMs?
    Mr. Joyner. We certainly support complying with the 
contracts that we have with our customers, and, again, our 
contract is to make sure that we are delivering the lowest net 
cost and managing the overall pharmacy cost for our customers.
    Mr. Langworthy. I think there is a reason PBMs do not want 
to be fiduciaries. In my remaining time, I would like to pivot 
and discuss a recent court ruling that CVS Caremark was 
involved in. Last year, an arbitration panel required CVS 
Caremark to pay over $20 million to just one oncology practice, 
New York Cancer and Blood Specialists, for miscalculating these 
fees. In essence, the company charged higher fees when an 
oncologist did the right thing by stopping an oral cancer drug 
that was not working and had side effects. CVS Caremark clearly 
stood in the way of properly treating cancer patients. Mr. 
Joyner, CVS Caremark fought to hide this award and not pay it 
vigorously, suing the oncology practice. However, last week, 
the New York Southern District Federal Court ruled in favor of 
the practice and ordered CVS Caremark to pay over $20 million 
in back DIR fees, interest and attorney fees.
    I enter that ruling into the record with unanimous consent, 
Mr. Chairman.
    Chairman Comer. Without objection, so ordered.
    Mr. Langworthy. I understand that other oncology practices 
are in arbitration right now with CVS Caremark over the same 
issue. Given the Federal Court's findings, do you intend to pay 
all practices back for a clear miscalculation of DIR fees, or 
do you intend to fight them like you did the New York practice?
    Mr. Joyner. Congressman, as I answered the question earlier 
today, we comply with all the Medicare Part D rules regarding 
network adequacy as it relates to also the DIR. So, we have 
consistent and standard terms and conditions, and we fully 
expect to administer and support those for our customers.
    Mr. Langworthy. Thank you very much. I yield back, Mr. 
Chairman.
    Chairman Comer. The Chair now recognizes Mr. Casar from 
Texas.
    Mr. Casar. Thank you, Chairman, and I would like to commend 
the Ranking Member and yourself on having this bipartisan 
hearing. I would like to see more of this and appreciate it.
    Today we are discussing pharmacy benefit managers, or PBMs, 
which, as we have talked about today, are pretty opaque 
organizations that most Americans do not know very much about. 
But the three leaders of these PBMs today touch or interact 
with about 80 percent of the prescription drugs accessed by 
Americans. And the goal of PBMs is to negotiate down the prices 
of the medicine that we need, but this comes at a time when 
Americans, indeed, are paying more for prescription drugs. The 
25 drugs with the highest Medicare spending have tripled in 
cost since entering the market. Between 2022 and 2023, 4,200 
drugs have seen price increases, and our country still has the 
highest per capita prescription drug spending among developed 
nations.
    And so, the goal that we have set for PBMs in this system, 
in my view, we are far from hitting that target. In fact, we 
are headed in the wrong direction. The three companies 
represented before us, though, are some of the most profitable 
companies in America. These three companies made a combined 
$400 billion in revenue and some $18 billion in profit in 2022. 
And so, to me, I think one of the core questions we are trying 
to ask today is, if there is this much profit in this industry, 
where are the savings for everyday Americans?
    We have discussed and I have heard from colleagues about 
how PBMs are connected to the same parent company as health 
insurance, which can limit patient choice. We have heard about 
how rebates, which are the savings negotiated by PBMs, could be 
raising the cost of drugs, and we have also heard how PBMs can 
shut out local pharmacies and drive profits toward pharmacies 
under their umbrellas. But I want to focus on a different 
issue, which is the question of group purchasing organizations, 
or GPOs.
    The three major PBMs have a GPO under their umbrella. If I 
am right, I think CVS' is Zinc, Express Scripts' is called 
Ascent, and Optum Rx's is called Emisar Pharma Services. The 
goal, supposedly, is to leverage purchasing power to negotiate 
greater savings from pharmaceutical manufacturers, but these 
are relatively new practices. From each of the witnesses, a 
quick yes or no, each of your GPOs was founded in or after 
2019. Is that correct, Mr. Joyner?
    Mr. Joyner. Correct.
    Mr. Casar. Doctor?
    Dr. Kautzner. Yes, that is correct.
    Mr. Casar. Thank you.
    Dr. Conway. Yes.
    Mr. Casar. And my understanding is that before those GPOs 
were founded relatively recently, PBMs were negotiating without 
the separate company doing it on their behalf. And so, the 
obvious question is, why do the PBMs need these new GPOs? 
According to New York Times reporting, a former Optum Rx 
executive said, ``The intention of the GPO is to create a fee 
structure that can be retained and not passed on to a client.'' 
And that is a big deal if the value is getting discounts and 
prescriptions, but now we have these totally new companies 
supposedly to create fees that then could not be passed along. 
In 2018, before any of the GPOs were founded, drug 
manufacturers paid $3.8 billion per year in fees to PBMs. By 
2022, they were paying $7.6 billion in fees to PBMs and to 
their GPOs.
    So, again, just here for my last minute, the point is that 
PBMs are supposed to be reducing drug prices, supposed to be 
reducing healthcare costs, but a 2022 study found that the 
average premium for individual health insurance has gone up 
$225. Two in 5 adults on employer-sponsored insurance are 
having difficulty affording their medical care. So, if people 
are paying more money, if the number of fees has nearly doubled 
here to $7.6 billion, then why are prices not coming down?
    I guess my question to you, Dr. Conway, for example, would 
be, if these GPOs are generating this much more in fees, where 
is the value to the American people? Why is it that annual 
premiums continue to go up? Why is it that thousands of drugs 
have seen price increases while billions of dollars in new fees 
and profits are going to PBMs and to their GPOs? Dr. Conway, 
you can take it.
    Dr. Conway. The purpose of the GPO is to negotiate rebates, 
larger discounts on our clients' behalf. As I said, many 
clients choose 100 percent of those rebates to pass through to 
them, and so we will continue to work to make medicines more 
affordable and healthcare more affordable for the American 
people we serve.
    Mr. Casar. Since you created these GPOs in 2019, we have 
gone from $3.8 billion in fees to $7.6 billion in fees, but we 
continue to see the price of drugs go up. How does that add up?
    Dr. Conway. So, the net prices of drugs we continue to 
negotiate down. The list prices of drugs have gone up 
exponentially in the U.S., and those list prices are set by 
manufacturers.
    Mr. Casar. Mr. Chairman, right before I yield back, I just 
think through all of the acronyms and all of the opaqueness we 
have been dealing within this hearing, we continue to see the 
American people pay more and more. And once you take away all 
of the sort of shell games, people are paying more, there is 
more profit going both to Big Pharma and to the PBMs, and it is 
ultimately our constituents that are left paying the price. 
Thank you. I yield back.
    Chairman Comer. The gentleman yields back. The Chair 
recognizes Mr. Gosar from Arizona.
    Mr. Gosar. Mr. Chairman, I yield my time to you.
    Chairman Comer. Thank you, Mr. Gosar. I appreciate it. In 
the past 5 years, the states and the Federal Government have 
begun enacting PBM reforms. Each of your companies or your 
parent companies created corporate entities in foreign 
countries, well known for their lack of financial transparency 
and low tax rates. Each of your companies has since begun 
shifting PBM duties, including negotiations with manufacturers 
to those foreign countries. In fact, Mr. Kautzner, Cigna 
Express Scripts created Ascent Health Solutions, based in 
Switzerland, to serve as a group purchasing organization, 
negotiating rebates with manufacturers. Cigna Express Scripts 
also created Quallent Pharmaceuticals, based in the Cayman 
Islands, to buy cheap pharmaceuticals and sell them at a higher 
rate in the United States. Mr. Conway, UnitedHealth Group's 
Optum Rx created Emisar Pharma Services, based in Ireland, to 
serve as a group purchasing organization negotiating rebates 
with manufacturers. Mr. Joyner, CVS Caremark created Cordavis, 
based in Ireland, to commercialize biosimilar products and 
resell them in the U.S. for higher prices.
    Your companies have created entities in foreign countries 
that appear to be for the specific purpose of avoiding U.S. 
regulation and avoiding U.S. taxes. This is simply not 
acceptable, but I will give you each the opportunity to explain 
why those three countries, Ireland, Switzerland and the Cayman 
Islands, were better locations for these companies than the 
United States. Mr. Joyner?
    Mr. Joyner. Mr. Chairman, Cordavis, which is located in 
Ireland, is in Europe, close to where the drug is being 
manufactured today. So, the whole premise of building an 
operation in Europe is to be close to where the drug is 
manufactured so it helps with the logistics, and the ability 
for us to bring the product into the U.S. And good news is, the 
biosimilar that we brought to market was a lower list price 
product. It was 82 percent below the price of Humira. As of 
April 1st, by removing Humira from our formulary, we actually 
pulled 97 percent of all the biosimilars through for our 
customers, yielding $500 million worth of savings for our 
clients. And the employees and/or the members of these firms 
actually paid zero dollars out of pocket for the medication. 
So, it is actually a win-win for us all.
    Chairman Comer. Dr. Kautzner?
    Dr. Kautzner. So, Mr. Chairman, the creation of Ascent 
Health Services in Switzerland as a group purchasing 
organization is delivering more value because of the 
aggregation of additional entities that are also participants 
within Ascent Health Services, more than what Express Scripts 
could do on their own. GPOs have been used within healthcare 
for decades and have been shown to lower costs for clients and 
for patients ultimately.
    Chairman Comer. Dr. Conway?
    Dr. Conway. Emisar is incorporated in the United States. It 
does have employees both in the United States and Ireland. And 
as stated by others, the purpose is to negotiate rebates and 
discounts on behalf of our clients, and we adhere to all laws 
and regulations and do that transparently.
    Chairman Comer. Mr. Joyner, in your written testimony to 
the Committee, you referenced a new transparency program called 
TrueCost. When did that program start?
    Mr. Joyner. Congressman, we announced it last year.
    Chairman Comer. Have you piloted the program to determine 
if it actually enhances transparency?
    Mr. Joyner. We have. In fact, we have now rolled it out to 
our own employees, effective June 1st, and have a number of 
customers lined up as we entered the----
    Chairman Comer. So, when will it be fully implemented?
    Mr. Joyner. So, our expectation is that it will be staged, 
but right now, our hope is that we will have a good portion of 
our business moved into 2025 and ultimately into 2026.
    Chairman Comer. Dr. Kautzner, in your testimony, you 
referenced the Independent Rx initiative that Express Scripts 
launched in spring 2023. What tangible benefits to independent 
rural pharmacies has this program produced?
    Dr. Kautzner. Mr. Chairman, we increased reimbursement to 
over 700 independent pharmacies out of our own pocket as part 
of this initiative. In addition, we convened an Independent Rx 
Committee that we have met several times already with, in-
person, 38 pharmacists, I believe, that are independent 
pharmacy owners, to work on advancing the practice of 
pharmacies so that pharmacist can practice at the top of their 
license.
    Chairman Comer. Has Independent Rx increased reimbursement 
rates to independent rural pharmacies?
    Dr. Kautzner. It has to over 700 that have accepted the 
increased reimbursement that we are paying out of our own 
pocket.
    Chairman Comer. Last question. You also referenced that the 
number of independent pharmacies in Express Scripts' commercial 
network increased by 20 percent from 2019 to 2024. Does this 
include the 15,000 pharmacies dropped from the TRICARE retail 
pharmacy network in late 2022?
    Dr. Kautzner. So, our broadest network had 18,000 
pharmacies roughly in 2019, which expanded to over 21,000 by 
2024. That is the 20 percent increase. The TRICARE network, 
over two-thirds of the independent pharmacies in our network do 
participate in TRICARE, but it is less than the total.
    Chairman Comer. The Chair now recognizes Ms. Pressley from 
Massachusetts. I want to thank the gentleman from Arizona for 
yielding his time. The Chair now recognizes Ms. Pressley from 
Massachusetts.
    Ms. Pressley. Thank you. The discussion today speaks to an 
injustice, an injustice that many of my constituents in the 
Massachusetts 7th experience daily: the high cost of lifesaving 
prescription medication. Pharmacy benefit managers, or PBMs, 
play an outsized role in determining coverage and cost of 
medication by designing lists of drugs that a health insurance 
plan will never cover for a patient, known as formularies. For 
some medications, PBM formularies require additional approval 
before you, a patient, can pick them up at the pharmacy. For 
example, prior authorization is a PBM power where a doctor must 
ask the insurance company if they can prescribe the specific 
medication and their so-called step therapy. That requires you 
to try different medication and have a negative reaction before 
being prescribed the medication that your doctor recommends.
    These policies are hurting people across our Nation, 
including in my district. One of my constituents, a mother, 
shared her story of how she was forced to go through a step 
therapy to treat her neurological condition and saw her 
condition worsen as a result, to the point where she spent a 
year relearning how to walk, and her story is no anomaly. Step 
therapy is not just ruining people's lives, it is killing them. 
Families have been robbed of their loved ones due to the 
delays, the greed, and harmful policies of PBMs.
    Mr. Joyner, CVS Caremark is one of the largest PBMs 
operating within my district. What do you say to my 
constituents who have been harmed by denying them the medical 
care that they need and deserve?
    Mr. Joyner. Congresswoman, I do not have the specific 
details of what you are referencing, but I certainly do 
understand and look specifically at ways in which we can 
improve the prior authorization process.
    Ms. Pressley. Are you sorry?
    Mr. Joyner. No. I think it is an important part of the 
healthcare system is to make sure that our customers hold us 
accountable and look to make sure we have oversight for both 
patient safety. They are also focusing on ways in which we can 
improve adherence to the therapy, because if they are not 
staying on therapy, obviously, then there is----
    Ms. Pressley. OK. Reclaiming my time. I wish you were 
sorry. You should be. I have not heard from a single doctor who 
can justify the public health benefits of the health insurance 
policies.
    According to the Federal Trade Commission, the committees 
responsible for determining access to medication do not just 
consider clinical recommendations. PBEs also ``take into 
account business considerations and make formulary 
determinations to maximize profits.'' I will remind the 
witnesses that you are all under oath. My next questions will 
be ``yes'' or ``no''. Mr. Kautzner, does Express Scripts factor 
in business considerations or potential profits when deciding 
access to prescribed medication? Yes or no, and, again, you are 
under oath.
    Dr. Kautzner. Thank you for the question, Congresswoman. We 
do a clinical-first approach, so all clinical evaluation is 
done first----
    Ms. Pressley [continuing]. Yes or no?
    Dr. Kautzner [continuing]. Then a financial evaluation is 
done after that.
    Ms. Pressley. Yes? Yes or no, for the record.
    Dr. Kautzner. Financial evaluation is included after the 
clinical.
    Ms. Pressley. Mr. Joyner, does CVS Caremark factor in 
business considerations or potential profits when deciding 
access to prescribed medication? Yes or no.
    Mr. Joyner. Congresswoman, we have a Pharmacy and 
Therapeutics Committee that assesses the clinical value of the 
medication.
    Ms. Pressley. You all are very smart. Can you just answer 
the question? Yes or no.
    Mr. Joyner. Like I said, we have a P&T Committee that 
assesses the clinical----
    Ms. Pressley. Reclaiming my time. Reclaiming my time. Dr. 
Conway, does Optum Prescription factor in business 
considerations or potential profits when deciding access to 
prescribed medications? Let us see if three will be the charm. 
Yes or no.
    Dr. Conway. Clinical consideration and lowest net cost to 
the customer, including a formulary exception process.
    Ms. Pressley. Reclaiming my time. Well, my office has met 
with patients, families, providers, and community pharmacists 
throughout my district from East Boston to Cambridge to 
Roxbury, and they all point to one conclusion: you are putting 
profits over people. Your corporations are denying people 
access to necessary medications, preventing them from going 
elsewhere by forcing independent pharmacies to close their 
doors. And that is why I am glad we are having today's hearing 
to shine a bright light on your unethical practices, and I look 
forward to working to Congress to rein in PBMs. Thank you, and 
I yield back.
    Chairman Comer. The gentlelady yields back. The Chair now 
recognizes Mr. Biggs from Arizona.
    Mr. Biggs. Thank you, Mr. Chairman. I associate myself with 
many of the comments of Representative Casar from Texas, and 
nobody will be more surprised than he, but it is true. I 
thought he did a nice job. Mr. Kautzner, I want to focus on 
active service members who are insured through TRICARE. The 
Department of Defense just renewed their exclusive contract 
with Express Scripts. Is that correct?
    Dr. Kautzner. That is correct.
    Mr. Biggs. It is my understanding that as part of this 
renewal, in October 2022, 15,000 independent pharmacies were 
removed from the TRICARE network. Were these pharmacies priced 
out, or did Cigna negotiate the removal from the network as a 
condition of renewal of the contract?
    Dr. Kautzner. So, Congressman, all independent pharmacies 
had the opportunity to continue to participate in the network, 
and they made a decision not to. We have subsequently opened 
back up their opportunity to participate should they want to.
    Mr. Biggs. How many came back?
    Dr. Kautzner. So, right now, two-thirds of the independent 
pharmacies in our total broadest network participate in the 
TRICARE network, and in total----
    Mr. Biggs. I am sorry. I do not want to be pushy, but when 
you say two-thirds of this or that, it does not do any good. I 
want to know how many. What is the actual number?
    Dr. Kautzner. So, roughly, if we have a network that has 
over 21,000 pharmacies in total, independent pharmacies in our 
network, two-thirds of those, roughly, are participating in the 
TRICARE network.
    Mr. Biggs. So, 14,000. Is that what you are telling me? 
Two-thirds of 21,000 is 14,000, right?
    Dr. Kautzner. It is an approximation, but it is in that 
area.
    Mr. Biggs. Did these pharmacies return in 2023 after the 
renegotiations?
    Dr. Kautzner. We continue to keep that open, so any 
pharmacies that want to choose to participate have the ability 
to.
    Mr. Biggs. How many of those came back after the 
renegotiation in 2023? Look, I am not playing ``gotcha.'' I 
just really want to know, OK?
    Mr. Kautzner. I do not have that information in front of me 
today, sir. We could certainly provide it, though.
    Mr. Biggs. Yes. Mr. Chairman, I want to introduce two 
unanimous consent. I always have articles, as you know----
    Chairman Comer. Yes.
    Mr. Biggs [continuing]. Article one, ``Prescription Drug 
Middleman Potentially Profiting Off Veterans'' and ``TRICARE 
Removed 15,000 Independent Pharmacies from Network'' into the 
record.
    Chairman Comer. Without objection, so ordered.
    Mr. Biggs. Thank you. I have serious concerns about how the 
situation looks. What is the justification for limiting choice 
and access to medication for service members, Dr. Kautzner?
    Dr. Kautzner. So, Congressman, we continue to exceed the 
access standards that are set by TRICARE, which, ultimately, 
are set by Congress for patients. Ninety-eight percent of 
patients that are TRICARE beneficiaries live within 15 minutes 
of a pharmacy that is in their network today.
    Mr. Biggs. It is my understanding that you are a vertically 
integrated corporation. Is that right?
    Dr. Kautzner. The Cigna Group has multiple different 
companies, if that is what you are referring to from vertical 
integration.
    Mr. Biggs. Yes. I think you know what vertical integration 
is. Do you ever steer patients, including service members, to 
your own pharmacies or to use mail order? In other words, do 
you ever steer consumers to your preference as opposed to 
necessarily their preference?
    Dr. Kautzner. Congressman, we carry out the benefit as 
directed by TRICARE, and TRICARE makes the decision on which 
pharmacies they want to have in their network and prefer.
    Mr. Biggs. So, I am going to ask that question again 
because you seem like a nice guy, you seem bright, so I think 
you can answer this question. Do you guys ever engage in 
steering patients to your preferred service provider?
    Dr. Kautzner. Congressman, if we are specifically speaking 
of TRICARE----
    Mr. Biggs. Yes.
    Dr. Kautzner [continuing]. TRICARE makes the decision on 
whether they want to prefer a pharmacy or not. So, in this 
instance, TRICARE does have our home delivery pharmacy as an 
option as a preferred pharmacy.
    Mr. Biggs. Thank you. Mr. Chairman, I am going to run out 
of time, so I am going to just give you some more of these as 
well. So, I think we did that one and that one. Here we go.
    ``Mail-Order Medications are Often Exposed to Unsafe 
Temperature;'' Study Says 90-day Prescription is not for 
everyone.'' ``How Chaos at Chain Pharmacies is Putting Patients 
at Risk;'' ``Independent Pharmacies Continue to Face Financial 
Hardships as the Clock Ticks on PBM Reform;'' ``America's 
Pharmacy Deserts''----
    Chairman Comer. Without objection, all those articles will 
be entered into the record.
    Mr. Biggs. Thank you, Mr. Chairman. I yield back.
    Chairman Comer. The Chair recognizes Ms. Tlaib from 
Michigan.
    Ms. Tlaib. Thank you, Chairman Comer. Chairman, I do want 
to help support all the text messages you got. I actually got 
letters of independent pharmacists to say they do not have 
great relationships with their PBM. One is from independent 
pharmacies in Flint, Michigan, another who owns a number of 
independent pharmacies in the Upper Peninsula in Michigan.
    Chairman Comer. Without objection, so ordered.
    Ms. Tlaib. Each of you have said that you have business 
plans or processes and methods in place to help lower cost for 
our residents, yet has been well documented there has been a 
huge reduction of pharmacies in many vulnerable areas. I do 
have really just a question, and it is really a yes or no, and 
I promise, like, you should know this. But did you all make 
more money, I mean, like, in 2023 than you did in 2022, like 
profit? Did you make more money, Joyner? Did you guys make more 
money? Are your profit is going up? Yes or no. Is it----
    Mr. Joyner. In 2024, my profits are going down from 2023.
    Ms. Tlaib. It is going down right now?
    Mr. Joyner. Yes.
    Ms. Tlaib. You are not making any money?
    Mr. Joyner. No, we are making money. I am just saying----
    Ms. Tlaib. But it is down from 2023?
    Mr. Joyner. Yes.
    Ms. Tlaib. Interesting. How about you, Kautzner? Kautzner, 
is that how you say----
    Dr. Kautzner. Yes. So, the Cigna Group's profits, as we 
report, did increase from 2022 into 2023 and for the first 
quarter of 2024.
    Ms. Tlaib. So, you are doing good. OK. How about you?
    Dr. Conway. Yes, Optum Rx earnings increased from 2022 to 
2023.
    Ms. Tlaib. By a lot. Is it, like, doing really well? I do 
not understand how you are making money and making profit if 
you are trying lower cost on our residents. I am just confused 
how you can do both. I know my colleagues are not going to get 
into it, but you got to be making money from somewhere if it 
continues to increase. So, one of the things that I know are, 
of course, the DIR fees and reimbursement, but one of the 
things in the report, and I know you all saw it, but in there 
it talks about the post-sale adjustments. Get this, and 
Chairwoman McClain and I come from the same state, but check 
this out. Post-sale adjustments can require a pharmacy to often 
blindly make payments of hundreds of thousands of dollars back 
to PBMs months after the relevant prescriptions are sold.
    So, this is, like, one of my residents going in, and they 
buy $5 worth, I do not know, dairy products or something like 
that. Like, I think I used the example of a gallon of milk. 
Goes in, buys a gallon of milk, later sees a charge of $5 
extra, like, after they left the grocery store. So, quoted in 
the report, it says we are often talking about PBMs charging 
hundreds of thousands of dollars. These are not small fees, 
though.
    So, the FTC report noted that one of the metrics PBMs often 
use is--it is really interesting--deciding whether or not to 
charge pharmacies retroactive fees. These are, again, they 
left, they paid for it, you all came back and charged them 
more. It is crazy. I kid you not, Chairwoman, but there are 
many reasons. So, they say that, basically, the post-sale 
adjustment is based on whether or not, like they are punishing 
them because a patient is unable to afford their medication, or 
when the patient cannot pick up the medication on time, that 
they have an unpredictable work schedule or something, whatever 
it is. It is some weird little factor you guys are putting in, 
reasons that might all of a sudden say, well, we got a post-
sale adjustment. How many of you use post-sale adjustments? 
Caremark, you guys use post-sale adjustments?
    Mr. Joyner. No. That program discontinued in 2023.
    Ms. Tlaib. How about you, Kautzner?
    Dr. Kautzner. Congresswoman, we do not engage in clawbacks.
    Ms. Tlaib. Yes. How about you?
    Dr. Conway. Optum Rx does not do clawbacks or charge DIR 
fees.
    Ms. Tlaib. So, what is this thing about you all doing the 
thing about using to determine whether or not to charge 
pharmacies, removing, like, the patient adherence? How many of 
you use that factor, that the patient adheres? How many of you? 
Kautzner, you look like you are interested in this question.
    Dr. Kautzner. So, Congresswoman----
    Ms. Tlaib. You guys got away----
    Dr. Kautzner [continuing]. The DIR program expired last 
year, so that is not----
    Ms. Tlaib. But do you at all determine post-sale 
adjustments or anything? You do not do any of that anymore?
    Dr. Kautzner. We do not engage in clawbacks.
    Ms. Tlaib. OK. You call it clawbacks. Is that what you guys 
call, clawbacks, post-sale? So, if any of your independent 
pharmacies, they walk out, you guys do not go back and say, 
oops, you owe another $10? None of you do that?
    Dr. Kautzner. That is not a practice that we are engaged 
in.
    Ms. Tlaib. OK. What is this about a factor using a patient 
adherence from factors being used to determine whether or not? 
Like, what is that about? Like, the patient is using it. I am 
being serious, you guys. This is something in the FTC report, 
so I am just curious. Did you guys stop it because they caught 
you, or what is going on here? You guys changed the name of it?
    Dr. Kautzner. The DIR program was actually removed. It was 
a government decision. It was not a decision that----
    Ms. Tlaib. We forced you guys to do it?
    Dr. Kautzner. It was enacted by the government.
    Ms. Tlaib. Yes, yes. We forced you to do it? What else 
should we be forcing you guys to do, because it is still--I am 
being serious. You know that you are in the practice. If you 
are making profits continually, it is not reducing the cost on 
our residents. Something is wrong. I mean, you hear this. I had 
one in my district, Chairwoman, last thing, he paid like $100 
or something right out of pocket. He never got reimbursed for 
it, ever. Again, whatever you all are doing, it is putting them 
out of business, and guess what? That means less access to our 
residents that really depend on independent pharmacies. But 
again, it sounds like we need to do some forcing them to act in 
good faith.
    If we stop those programs, what else do we need to stop so 
they can treat everybody fairly and not monopolize as well? I 
know you guys do that and you do not offer everybody the same 
service, and that is ridiculous. With that, I yield.
    Mrs. McClain. [Presiding.] Thank you, and I now recognize 
myself for 5 minutes.
    I think part of one of the biggest issues we have is the 
pharmacists think there is a problem. The patients who use the 
services think there is a problem. I am curious to see, do you 
all think there is a problem with the PBMs? Mr. Joyner?
    Mr. Joyner. Congresswoman, as I mentioned in my opening 
statement, I do believe that there is an opportunity to 
improve.
    Mrs. McClain. So, is that a yes? The reason why I ask is 
because we cannot fix a problem that we do not think exists. 
Yes, there is an opportunity to improve. I am asking you, do 
you think there is an issue, do you think there is a problem, 
because perception is 90 percent of reality and the user thinks 
there is a problem, the pharmacist thinks there is a problem. I 
am wondering if you think there is a problem.
    Mr. Joyner. I absolutely believe that there is an 
opportunity to solve that problem through----
    Mrs. McClain. So, is that a yes?
    Mr. Joyner [continuing]. TrueCost.
    Mrs. McClain. Is that a yes?
    Mr. Joyner. So,----
    Mrs. McClain. OK. Never mind. How about you, Dr. Kautzner? 
Do you think there is a problem that we have an opportunity to 
fix?
    Dr. Kautzner. Congresswoman, healthcare is hard. So, agree 
that there are challenges and continued issues that we can all 
do better on, and we certainly can be part of that solution.
    Mrs. McClain. OK. I want to ask it one more time before my 
patience gets--do you think there is a problem?
    Dr. Kautzner. Congresswoman, there are always challenges 
within healthcare.
    Mrs. McClain. OK.
    Mr. Kautzner. And so, we all----
    Mrs. McClain. I reclaim my time. Dr. Conway?
    Dr. Conway. Yes, as a practicing physician, medicines need 
to be of----
    Mrs. McClain. Hallelujah. Do you gentlemen see how he 
answered that question? Yes, there is a problem. We might be 
able to get to some solutions, and I think therein lies the 
problem. You all are the middlemen. You all want to make a 
profit which, OK, that is good, but if you are not delivering 
an outcome to the people who use it, how long do you all think 
you are going to have a job? There is a problem, we got to fix 
it, right? And part of the issue is prescription drug prices 
have increased every single year for the past 15 years, and the 
so-called middlemen in the drug market, the PBMs, clearly have 
the ability to impact that cost. And I remind everybody the 
reason why we put this program together was to help reduce 
costs. Am I inaccurate on that?
    [No response.]
    Mrs. McClain. It seems to have done the opposite, yet the 
most concerning thing to me is I continue to ask you all when 
you come into my office because you seem to think that there is 
not an issue--except for you, Dr. Conway, and I appreciate 
that--is show me the data that supports your position, right? 
Just show me the data because the other side that thinks there 
is a problem, the end user, has the data, right?
    My colleague from Michigan has testimony from our 
constituents telling us that there is a problem. They have this 
little thing called data. When I ask you all for data, ad 
nauseam, I might say, you send me a really pretty PowerPoint, 
which I would like to enter into the record, which is a sales 
piece.
    Mrs. McClain. I spent 35 years in sales. This is not data.
    So, I am going to ask, before we go on, do you have and if 
you do not, that is OK. Perhaps that is where you should start. 
Do you have specific data, not a pitch book, but do you have 
specific data that you could share with me and the Members of 
this Committee that shows you actually are doing what the PBMs 
are supposed to do and that is save costs for the patient? Do 
you have specific data that you will actually send to me, Mr. 
Joyner?
    Mr. Joyner. Absolutely. We will send you----
    Mrs. McClain. And when could I expect that?
    Mr. Joyner. I will work with my staff and get it to you 
ASAP.
    Mrs. McClain. ASAP as in Monday perhaps?
    Mr. Joyner. I will work with my staff.
    Mrs. McClain. That is great. ASAP as in 2 months from now? 
ASAP as in 2 years from now of which I have been asking?
    Mr. Joyner. Yes.
    Mrs. McClain. ASAP just as like ASAP.
    Mr. Joyner. No, we do----
    Mrs. McClain. OK. I will pay you as soon as I can pay you, 
too. Do not you worry. I will get you your profits ASAP, yes? I 
cannot define ``ASAP'' but, you know, like ASAP.
    Mrs. McClain. How about you, Mr. Kautzner? When can I 
expect this data, not the pitch book?
    Dr. Kautzner. Congresswoman, I refer you to review the 
written testimony that we submitted. It is a lengthy testimony, 
and it is full of data and stats of the good work that we do 
and would be happy to followup on any additional stats that----
    Mrs. McClain. Good. Let us book a meeting with you and I. I 
would be more than happy, OK? I would enjoy that because 
therein lies your problem is you all do not think you have a 
problem, and I have been asking ad nauseam for data and you 
shuck and jive. ``Oh, look over here. ``Oh, it is not really 
happening.'' ``Oh, it is two-thirds.'' Well, I am not really 
sure how much two-thirds is. I mean, people are having 
problems. You want zero transparency. I can see why. It is like 
we are trying to help you. One side is saying they are hurting, 
the American people who pay costs are hurting, yet you do not 
have any data to show us. It is very, very frustrating, and I 
will just share with you where this is going to end. This is 
going to end that the PBMs being out of business and the only 
people you have to blame for that is yourself.
    And with that I am over. I will yield back. The Chair now 
recognizes Mr. Frost for 5 minutes.
    Mr. Frost. Thank you so much, Madam Chair. Patients are 
paying hundreds of dollars for extra drugs, thanks to Big 
Pharma and PBMs. PBMs are claiming that they are lowering 
medication costs, but for many drugs they are not. PBMs, you 
all are doing dirty deals, conspiring with Big Pharma to drive 
up drug prices. Big Pharma says to PBMs, agree to recommend 
expensive brand-name drugs to healthcare plans and we will give 
you better rebates, like a recent FTC investigation brought up. 
For example, Mr. Kautzner, your PBM only suggests brand-name 
drugs that treat hepatitis C, even though cheaper generic 
alternatives exist, according to a recent New York Times 
article. Mr. Kautzner, has Express Scripts, your company, ever 
entered into a rebate agreement that requires Express Scripts 
to cover a brand name medication instead of a generic one?
    Dr. Kautzner. So, Congressman, in terms of first hepatitis 
C, we led the charge on that a decade ago and saved our clients 
a billion dollars and saved American healthcare $4 billion.
    Mr. Frost. But is it ``yes'' or ``no'' on the question I 
asked? Has your company entered into rebate agreements that 
require your company to cover brand medication instead of 
generic ones? Yes or no.
    Dr. Kautzner. There are times when we will prefer a brand 
product over a generic----
    Mr. Frost. Why?
    Dr. Kautzner [continuing]. When there is limited generic 
competition, and the lowest net cost is the brand is actually 
cheaper, and we actually are able to put in our system so the 
patient pays the generic copayment or the generic coinsurance. 
So, the patient is not harmed in those situations and our 
clients actually save. The reason they save is because brand 
manufacturers contract and prevent generics from entering the 
market, and when you have limited competition, sometimes a 
brand actually can be cheaper.
    Mr. Frost. Reclaiming my time. So, the answer is, yes, you 
have entered into rebate agreements with these companies to 
push a brand medication instead of generic. You are saying that 
there is cost savings, but patients still have to pay more 
since the copays are usually higher for the brand-name drugs 
versus the generics.
    When PBMs are not doing dirty deals and they do suggest 
generic drugs to healthcare plans, they have been known to 
charge massive markups. One example, Mr. Joyner, your PBM 
charge some healthcare plans $138,000 a year for a generic 
cancer drug that actually has a wholesale cost of just $14,000 
a year, according to a recent New York Times article. That is 
an 885-percent increase in price. Mr. Joyner, the cost of that 
greed is passed directly on to ordinary people. Will you commit 
right now to lowering the cost of generic medications like this 
one on your formularies?
    Mr. Joyner. So, Mr. Congressman, we have committed and I 
have mentioned in my opening testimony that we are introducing 
a new price model by the name of TrueCost, and we are committed 
to lowering the cost of both brands and generics for members.
    Mr. Frost. That is good. That is good. So, can you commit 
right now that the current increase on that is 885 percent? Can 
you at least commit to not going higher than 885 percent of a 
markup on your generic medication?
    Mr. Joyner. So, if you look at TrueCost----
    Mr. Frost. Is it ``yes'' or ``no?'' Would you be able to do 
it? Would TrueCost make sure that----
    Mr. Joyner. Absolutely. TrueCost, which is our new 
innovation, and what we believe is changing the marketplace.
    Mr. Frost. That is good. So, because of TrueCost, we can 
confirm today that at least the medication will be marked up 
885 percent?
    Mr. Joyner. No, that is not----
    Mr. Frost. No? So, it could go over 885 percent?
    Mr. Joyner. So, TrueCost allows us to get to the 
acquisition cost of the product, which is----
    Mr. Frost. Mr. Joyner, I am sorry. Just a ``yes'' or 
``no.'' Sir, are you saying, no, it cannot?
    Mr. Joyner [continuing]. Passed on to the member.
    Mr. Frost. It could be 885 percent of the markup on the 
generic medication?
    Mr. Joyner. No, the way in which----
    Mr. Frost. No? Now, it is no?
    Mr. Joyner. The way in which the TrueCost price model will 
work is that we will take 14,000----
    Mr. Frost. OK. I am going to move on because I have limited 
time, but it was a simple ``yes'' or ``no.'' I thought it was a 
``yes,'' and you went back to ``no.'' It seems like, no, you 
cannot say that you will not be having an 885 percent markup on 
generic medications. PBMs and Pharma are both to blame for 
these high drug prices. You guys love to point fingers at each 
other, but this will not work. We are holding both of you 
accountable.
    I know you like to talk about this 6-percent number. Your 
PBMs will talk about how they take home just 6 percent of the 
cost plans and patients pay for prescription drugs while pharma 
takes 64 percent. But that just tells part of the story because 
that 6 percent number, that statistic comes from the cost of 
drugs you cannot even negotiate for. PBM's real cut of the 
profit is much higher when you look at the drugs that you 
touch.
    I am just curious, Dr. Conway, what was your salary this 
last year?
    Dr. Conway. My salary last year was a little north of $4 
million.
    Mr. Frost. Dr. Kautzner?
    Dr. Kautzner. Sir, I would be happy to provide that 
offline.
    Mr. Frost. Do you like to provide it now? I just got it 
from Dr. Conway.
    Mr. Kautzner. Our company does publish----
    Mr. Frost. OK. I am moving on. You do not want to say it. 
Mr. Joyner?
    Mr. Joyner. I just came back to the company, so I am now in 
my first year.
    Mr. Frost. What are you supposed to get this year?
    Mr. Joyner. I will followup with you offline.
    Mr. Frost. Followup offline. I know I am over time, but it 
does not matter if you are Democrat or Republican, this is a 
crisis in this country. People are dying because they cannot 
afford their medication, and you all are part of the problem. I 
yield back.
    Chairman Comer. [Presiding.] The Chair now recognizes Mrs. 
Miller-Meeks from Iowa.
    Mrs. Miller-Meeks. Thank you very much, Mr. Chairman, for 
allowing me to waive on to this critically important hearing, 
and thank you for moving my cost saving PBM reform legislation, 
The Drug Act, favorably through your Committee earlier this 
year. Let me also just add on to what my colleague just said in 
who is responsible for high prices in prescription drugs, and I 
am going to add that government is also responsible for that in 
some of the legislation that we put forward.
    It is no secret that PBM middlemen artificially inflate the 
cost of and limit access to prescription drugs. My first 
attempt at PBM reform was as a state senator when I passed a 
bill in 2019, trying to get at transparency of this 
marketplace. This occurs at the expense of patients who receive 
health insurance in public and private markets and impacts 
patients of all ages. The PBM market has become highly 
consolidated with the three largest PBMs controlling roughly 80 
percent of prescriptions. The top six PBMs account for 97 
percent and in Medicare Part D, four PBMs managed benefits for 
a combined 90 percent of beneficiaries.
    PBMs claim that they reduce drug prices by holding 
pharmaceutical companies accountable. This is done by requiring 
rebates on drugs, which are then passed on to the beneficiary, 
but is that beneficiary the patient? While PBMs often do not 
negotiate discounts from manufacturers, patients are not the 
ones who benefit from them. In Medicare Part D, for example, 
patient cost sharing is based off the list price of drugs which 
are artificially inflated by the PBMs to extract a higher 
rebate.
    As a result of these practices, for 79 of the 100 most 
rebated drugs in Medicare Part D, beneficiaries pay more for 
the drug than their insurer, again, demonstrating that 
beneficiaries--in this case, seniors--are not benefiting from 
rebates. This is why I led the bipartisan Share the Savings 
with Seniors Act, which would require full rebate pass through 
for chronic care drugs covered under Medicare Part D plans. 
Another way PBMs cut cost at the patients' expense is by 
limiting the number of treatments available on formularies 
despite claims by PBMS that they promote access. In 2022, 1,156 
medications were excluded from at least one of the three PBMs--
CVS Caremark, Optum Rx, and Express Scripts--from their 
formularies which represented a 961-percent increase and 
excluded products from 2014.
    This is not a partisan issue. Every American who utilizes 
prescription medications experiences the impact that PBMs and 
vertical integration have on our healthcare system. And let me 
also say that my mother had Express Scripts, and for me, there 
are some benefits that PBMs actually help to provide. However, 
this is why that the Federal Trade Commission, because of this 
vertical integration which currently comprises our Federal 
Trade Commission, more Democrats and Republicans are 
investigating the harmful impacts of middlemen and the vertical 
integration.
    Chair Khan of the FTC stated in recent interim report that 
dominant pharmacy benefit managers can hike the cost of drugs, 
including overcharging patients for cancer drugs, and that PBMs 
can squeeze independent pharmacies of many Americans, 
especially those in rural communities that depend on essential 
care. In Iowa, for example, 25 independent pharmacies have 
already closed this year, and I met with Hy-Vee, which is a 
grocery retailer, that also has pharmacies. They are in seven 
states. They are closing two pharmacies. And so, if you have a 
multistate company or national companies that cannot keep 
pharmacies open because of the cost and reimbursement or 
reimbursing lower than what it cost a pharmacy to acquire the 
drug, these independent community pharmacies will close and are 
closing.
    When the FTC testified in front of the Energy and Commerce 
Committee earlier this month, the witnesses confirmed that your 
companies have not been complying with document requests, and 
that was true of my first bill in Iowa. We were supposed to 
have data within a year. It took 3 years to get data that was 
already in the possession of the PBMs. If your companies are so 
convinced that they can lower drug cost and increase access to 
innovative treatments for patients, you should be eager to 
demonstrate and not withhold information. Patients in my 
district are getting squeezed at the pharmacy counter and are 
seeing access to lifesaving medications restricted. This is why 
I am actually proud to lead these multiple bills to reform the 
drug pricing landscape to ensure PBMs and insurers are actually 
helping patients.
    Questions to any of you three. Many experts recognize that 
misaligned incentives in the current payment system have led to 
PBMs to favor medicines with high list prices and larger 
rebates or discounts. However, when your companies faced 
exposure over this rebating practice, PBMs have shifted their 
compensation models to focus on administrative or other fees, 
which have typically remained tied to list prices. So, even in 
the cases where PBMs are passing most of the rebates back to 
health plans, PBMs still have an incentive to favor high list 
prices and doing so the current PBM compensation model is 
causing patients to face a higher financial burden for their 
prescription drugs. In my view, PBMs should not tie their 
compensation to the price of a medication, especially a 
percentage of the medication. That seems counter to your stated 
mission of lower drug costs. Do you not agree? Mr. Joyner, 
agree or disagree?
    Mr. Joyner. So, we have actually introduced a biosimilar at 
a low list price. So, we do believe that introducing products 
at a low list price is actually beneficial for our customers 
and the patients and the PBM.
    Mrs. Miller-Meeks. Thank you. Dr. Kautzner?
    Dr. Kautzner. Congresswoman, we have been on the record for 
years of employing drug manufacturers to lower their list 
prices and continue to do so.
    Mrs. Miller-Meeks. And Dr. Conway?
    Dr. Conway. We want manufacturers to lower their list 
prices.
    Mrs. Miller-Meeks. I would like PBMs to have a reduction in 
the amount of a drug that they are putting into the billions of 
dollars that are in this marketplace and will continue on the 
PBM reform that I have started on. Thank you so much, Mr. 
Chair. I yield back my time.
    Chairman Comer. Thank you. The Chair now recognizes Ms. Lee 
from Pennsylvania.
    Ms. Lee. Thank you, Mr. Chair. In Southwestern 
Pennsylvania, we are deeply familiar with the consequences of 
concentrated corporate power in our healthcare systems. Whether 
it is the hospital system, a health insurance conglomerate, or 
both combined, the consequences of healthcare monopoly are 
always the same, higher costs, reduced access, and worsened 
health outcomes. And with health insurance companies like 
United Health, Cigna, and Aetna, it is evident that through 
their monopoly power, they have been able to rig our healthcare 
system to prioritize profits over patient health, capitalizing 
on each level of the drug supply chain to boost shareholder 
returns.
    Last year, the parent companies for all three PBMs 
testifying here today were incredibly successful as evidenced 
by their windfall profits. And I know that some of my 
colleagues before me have gotten at this, but I am still 
curious. Mr. Joyner, how much total revenue did CVS Health 
report in 2023?
    Mr. Joyner. Just shy of $180 billion, I believe.
    Ms. Lee. And how much of total amount was attributable to 
Caremark?
    Mr. Joyner. The question was CVS Health?
    Ms. Lee. Yes, but then how much of that was attributable to 
Caremark?
    Mr. Joyner. The Caremark revenues were just shy of $180 
billion.
    Ms. Lee. Thank you. Mr. Kautzner, how much total revenue 
did Evernorth Health Services report in 2023?
    Dr. Kautzner. Congresswoman, I do not know the exact 
amount, but it is certainly within the filings that we provide. 
What I can say is----
    Ms. Lee. Yes. I believe its $153.5 billion. How much of 
that total was attributable to Express Scripts?
    Dr. Kautzner. So, we do not report the Express Scripts' 
segment on its own, so I could not provide that information.
    Ms. Lee. Thank you. Dr. Conway, how much total revenue did 
United Health Group report in 2023? I am sorry, can----
    Dr. Conway. I am sorry. I believe it was in the high $360 
billion in terms of revenue for the whole group.
    Ms. Lee. How much of that amount was attributable to Optum 
Rx?
    Dr. Conway. A hundred 16 billion dollars was the revenue of 
Optum Rx last year.
    Ms. Lee. So, while your three companies earn billions, 
Americans continue to pay some of the highest cost for 
medications in the world. Last March, the Kaiser Family 
Foundation released data showing more than a quarter of adults 
said it was either somewhat or very difficult to afford 
prescription drugs. For people of color, 60 percent of black 
respondents and 65 percent of Hispanic respondents reported 
difficulty affording healthcare, and this is despite your 
claims of negotiating significant rebates from drug 
manufacturers to lower drug prices.
    So, to any of you, it appears that this system of rebates 
actually benefits the PBMs rather than the patients as we have 
been talking about. How do you explain this discrepancy? 
Anyone? Dr. Conway?
    Dr. Conway. So, we compete in a market that is competing on 
lowest net cost to the customer, clinical programs, 
transparency, and choice. It is a highly competitive market. I 
have been in this role for about a year. Retention rates are 
98-plus percent in Optum Rx, and within that market, we work 
each and every day to make drugs more affordable. To your 
point----
    Ms. Lee. But they are not more affordable.
    Dr. Conway. So, as I mentioned earlier, we have got over 
290 drugs now in a program we rolled up that is zero-dollar or 
$5 copays, so less than $35, typically zero dollars and $5. I 
agree with you that we need to continue to work along with 
stakeholders' processes----
    Ms. Lee. Thank you. Yes, thank you, thank you for that.
    Dr. Conway [continuing]. Make more affordable.
    Ms. Lee. Thank you. Just stick in there. Last year, Optum 
Rx's former CEO testified before the Senate Committee on 
Health, Labor, Education, and Pensions. She explained that some 
of your customers, ``Choose to compensate us for the savings we 
generate and the services we provide by opting for us to retain 
a small fraction of discounts we negotiate with pharmaceutical 
manufacturers.'' For companies that choose this compensation 
model, what percentage of the discount you negotiate with drug 
companies does Optum Rx retain on average?
    Dr. Conway. The majority of customers choose 100 percent 
rebate passthrough. On average, across the entire book, it is 
98 percent of rebates that are passed through to our customers.
    Ms. Lee. Your former CEO stated that ``Other customers 
prefer that we pass along 100 percent of the savings we 
negotiate.'' So, on average, how do clients who choose this 
model pay Optum Rx as an administrative fee?
    Dr. Conway. They have a set of choices in how they pay us. 
Some of them choose administrative fees. There is a set of 
options that we provide to them transparently that they select 
on how they reimburse us for our services.
    Ms. Lee. It is clear that the savings you are claiming to 
be providing the patients are either woefully inadequate or not 
reaching them at all. I look forward to working with my 
colleagues to reign in PBM monopoly power and lower drug costs 
for all patients, and I thank you all for your time. I yield 
back.
    Chairman Comer. The Chair now recognizes Mr. Sessions from 
Texas.
    Mr. Sessions. Mr. Chairman, thank you very much. Thank you 
to the panel that has spent a good bit of time here. I am a 
strong proponent of the free enterprise system and of 
capitalism, but along with that comes something which you find 
yourself embroiled in today and it is not new to you, and that 
is the view that a few PBMs control more than 80 percent of the 
market, and part of the free enterprise system, or at least 
capitalism, is opening markets up.
    You and I both understand, and that is fine because I use 
some of them back home, larger pharmacy chains that then have 
some bit of influence about where the market goes, who, where 
the drugs are given out. But as I read about what was called 
spread pricing, it then disturbs me, and that is really why we 
are here today, I think why the Chairman is here, why the 
Ranking Member is here, why all these members are coming forth 
because we think that. And it is best said here, due to PBM's 
role as middlemen and their responsibility to reimburse 
pharmacies for dispensing drugs, PBMs can reimburse pharmacies 
that they own more than they give to competing pharmacies such 
as community and independent pharmacies. But it really is a 
little bit more than that as an example, and that is maybe 
others are not even included in options that are available at 
the time they order their drugs.
    One example may be Blink that I am aware of. Blink has a 
number of employees in the district that I represent, and they 
are, once again, just like you are part of the free market, 
part of doing things, but they are part of the free enterprise 
system, part of the effort to provide competition which is a 
basis of how we as Republicans think. Tell me about the ability 
that companies have, perhaps their pharmacies, perhaps their 
insurance company, perhaps they are you, about blocking 
competitors rather than allowing what might be an opportunity 
for customers to more fully get the carrier or the provider 
that they want? Anyone? Mr. Joyce?
    Mr. Joyner. Yes, Mr. Joyner. Thank you, Congressman.
    Mr. Sessions. Joyner.
    Mr. Joyner. Yes. So, the networks work differently by 
market type. So, in Medicaid as an example, as in any willing 
provider, which essentially means that anybody can participate 
assuming that they are agreeing to the terms and conditions of 
the contract. As you move to the commercial where you actually 
deal with employers, employers have different needs and many of 
them are looking to either open up a network because they want 
to make sure it is open access, but they are also, as a result, 
generally paying more money.
    There are others that are looking to save money and they 
want to restrict and do not narrow the network. And so, what we 
do is facilitate the options to help them actually make the 
decisions that are best for them, ultimately trying to cater to 
the employer choice and making sure that we actually show them 
options to be able to create savings and/or a better experience 
for the employees they serve.
    Mr. Sessions. So, preferred customer. This is not unusual.
    Mr. Joyner. Correct.
    Mr. Sessions. What you are describing is a part of the 
system, and that is what you are saying that you and working 
with the people who contract with you make the decision. At 
what point then would--either, any of you three--would a person 
without an employer, without, you know, where probably a vast 
number of Americans are, who is looking out for them?
    Mr. Joyner. So, the employer and/or those that are 
providing the benefits for them are looking out. Most employers 
that you talk to want to make sure that they are offering a 
benefit that is attractive and is seen as a benefit because 
they are spending a lot of money on healthcare for their 
employees. So, they are looking out for the wellbeing and they 
are expecting us to deliver best-in-class service and also 
making sure that we deliver the savings to be able to provide 
an affordable benefit.
    Mr. Sessions. So, they would come to you and you would say 
to them, by coming to us here is a benefit that we give to you, 
and by a larger amount of dollars that you would spend with us 
or numbers of customers, we would give you a preference. OK. 
Mr. Chairman, I ask for just 30 more seconds.
    Chairman Comer. Go ahead.
    Mr. Sessions. So, what this group of people here are about, 
Members of Congress, we do not see where that is necessarily 
open to better competition, better prices, and to people who 
may be left out of those equations. They may not have an 
employer-provided benefit. They may not have a preferred 
company that would advocate on behalf of them. And I think if 
we were being realistic, we would say, and say to you, too, 
that is why we are here today. We would like there to be the 
same advantage for a larger number of people than is available 
today and I think you can accept that and not argue with it.
    Look, I spent 16 years with AT&T. Not everybody came to 
AT&T. There was a more robust market. There needs to be a 
robust market for people that do not have advantage. I 
appreciate each of you being here today. Mr. Chairman, I yield 
back my time.
    Chairman Comer. The Chair now recognizes Ms. Porter from 
California.
    Ms. Porter. Mr. Joyner, before the COVID vaccine, what was 
the highest grossing drug of all time?
    Mr. Joyner. I am sorry. Before the what?
    Ms. Porter. Mr. Joyner, before the COVID vaccine, what was 
the highest grossing drug of all time?
    Mr. Joyner. Humira.
    Ms. Porter. Humira? That is because for 20 years, Humira 
was the only option for rheumatoid arthritis patients. People 
did not have cheaper alternatives, and they literally ended up 
paying the price, and that price without insurance was a 
whopping $7,000 per month. And before you decide to put all the 
blame on to AbbVie, the manufacturer of Humira, I will remind 
you that I had some choice words for AbbVie's CEO, so we 
already know they are a big part of the problem here. But good 
news, in 2023 Humira's patents finally ended and cheaper 
biosimilar drugs came on the market. So, Mr. Joyner, by the end 
of 2023, how much of the market did Humira's competitors 
control?
    Mr. Joyner. Less than 1 percent.
    Ms. Porter. Wait. You are telling me that patients have the 
option to get a much cheaper drug and almost everyone wanted to 
pay more money to get Humira? Make it make sense, Mr. Joyner. 
Were the biosimilars not as clinically effective?
    Mr. Joyner. No, it is a great question, Congresswoman, and 
generally speaking, the products that came to market initially 
were priced more like brands. So, we were working with another 
manufacturer, bringing a product to market that was actually 82 
percent less than the list price of Humira. And in April of 
this year, we actually removed Humira, the most successful 
product in the country, from our formulary. We converted 97 
percent of that volume. In fact, in just 3 weeks' time, we 
built more market share than all was dispensed in 2023.
    Ms. Porter. Mr. Joyner, that is remarkable. Why did it take 
a year and a half?
    Mr. Joyner. We believe because----
    Ms. Porter. Was it because you were waiting until you could 
manufacture your own version of Humira called, I believe it is 
Hyrimoz?
    Mr. Joyner. So, we actually brought a product to market in 
April because that is when we believe that there was enough 
manufacturing capacity----
    Ms. Porter. April 2024?
    Mr. Joyner. Correct. And we saved 50 percent off of the 
2022, spent $500 million worth of savings for our customers, 
and the patients basically paid zero dollars out of pocket. So, 
it was a really great success story today.
    Ms. Porter. Well, there is no doubt that Humira having 
competition has been a good thing, but you waited over a year 
from when the Humira biosimilars became available, to put them 
on your drug list. Yes or no.
    Mr. Joyner. So, not a year from when the Hyrimoz product 
was introduced, but----
    Ms. Porter. No, let me repeat the question. Let's try to 
get an answer. Did CVS--yes or no--Caremark wait a year to add 
Humira biosimilars to their drug list?
    Mr. Joyner. No, we added biosimilars to our drug list in 
2023. We did not remove Humira until April of----
    Ms. Porter. So, a patient would have paid the same for 
Humira and the biosimilars at that time?
    Mr. Joyner. It would have also had copay support, so they 
could have gotten the benefit of a zero-dollar out-of-pocket 
cost.
    Ms. Porter. How much did CVS receive in rebates from 
Humira's manufacturer, AbbVie, in 2023?
    Mr. Joyner. I am not certain.
    Ms. Porter. Mr. Chairman, I ask unanimous consent to enter 
into the record a Kaiser Family Foundation health news article 
titled, ``Save Billions or Stick with Humira: Drug Brokers''--
that would be you all--``Steer Americans to the Costly 
Choice.''
    Chairman Comer. Without objection, so ordered.
    Ms. Porter. So, that article says that Humira's rebates 
were at least 40 to 60 percent of the drug's list price in 
2023. Does that sound right to you?
    Mr. Joyner. It is in the ballpark.
    Ms. Porter. OK. So, let us use the low figure of 40 percent 
being the rebate of the list price that you negotiated. This is 
your value in the marketplace, correct, negotiating this 
rebate? How much did Humira generate in sales in 2023? Do you 
know?
    Mr. Joyner. I do not know.
    Ms. Porter. Fourteen-point-four billion. What is 40 percent 
of 14.4 billion?
    Mr. Joyner. So, 52?
    Ms. Porter. Pretty good. Pretty good math. Five-point-six 
billion dollars. Did all that money that you got as a rebate, 
did it go to patients?
    Mr. Joyner. The rebates were passed through to our 
customers, the employers, the organizations that fund 
healthcare in this country, and then they use those dollars, in 
some cases to actually pass it on to the members.
    Ms. Porter. You did not retain any of that rebate?
    Mr. Joyner. As we have mentioned in my opening statement, 
CVS Caremark passes through 99-plus percent of all the rebates 
that we negotiate with the manufacturers.
    Ms. Porter. Look, I think here is the problem. Pharmacy 
benefit managers today are the worst kind of middlemen. You 
stop competition, you prevent transparency, you manipulate 
markets, and you make our healthcare system more complicated. 
Dr. Kautzner, you said healthcare is hard. No, the practice of 
medicine is hard. Healthcare is just a profit center in this 
country. I yield back.
    Chairman Comer. The gentlelady yields back. The Chair now 
recognizes Mr. Buddy Carter from Georgia.
    Mr. Carter. Thank you, Mr. Chairman, and thank you for you 
allowing me to waive on, and, gentlemen, thank you for being 
here. I want to congratulate you. You have done something that 
very few people have been able to do and that is to bring 
bipartisanship to Congress. I am so impressed with the 
testimony and the questions that have been given here today. 
They are spot on because at the end of the day, we all want the 
same thing. Whether you are a Republican, whether you are a 
Democrat, whether you are an Independent, you want accessible, 
affordable, quality healthcare. All of us want that. This is 
why we are here today.
    I want to bring it to a more personal note. And the reason 
I want to do that is because, as you know, I am a pharmacist, 
and I practiced pharmacy for over 40 years. And patients come 
to me. In fact, last week, in my office, I had a phone call 
with the mother of Matty. Matty is a 15-year-old from Georgia. 
Matty has a rare genetic disorder called spinal variant 
neurofibromatosis type 1. Tumors grow on every single level of 
his spine and his chest wall.
    [Photo.]
    Mr. Carter. This is a picture of Mattie behind me. The 
family asked that I share this with you. Mr. Joyner, CVS 
Caremark denied Matty's access to a lifesaving drug, Pulmozyme, 
that he had been on for 2 years, and he almost died as a 
result. In fact, he ended up in the hospital. He is still in 
the hospital. He is back in the hospital for the foreseeable 
future, and the rest of his life could be impacted because of 
it. All of a sudden, he had been getting this drug for 2 years, 
and CVS Caremark came in and said you do not have a diagnosis 
for it.
    What would you say to Matty's family, Mr. Joyner? As a 
pharmacist, what am I supposed to say to Matty's family about 
this?
    Mr. Joyner. Obviously, this is a terrible situation, and I 
certainly feel sorry for the way in which this case has 
proceeded.
    Mr. Carter. Do you feel like CVS Caremark is providing 
quality care to Matty?
    Mr. Joyner. I do not know the specifics of this case. I 
will say that we do follow evidence-based guidelines, and so 
the goal is to make sure that we are looking at each individual 
case as it relates to the----
    Mr. Carter. I just want to make sure, Dr. Kautzner and Dr. 
Conway, that you all understand, that we are talking about real 
people here. We are not talking about just a business model. 
Yes, I was a business owner for 32 years. I owned three 
pharmacies, institutional pharmacy, a number of businesses, but 
we are talking about real people. After all, for 40 years, I 
was the one who had to go to the counter and tell the patient 
how much the medicine was. I was the one who watched a senior 
citizen make a decision between buying groceries and buying 
medicine. I was the one who watched a mother in tears as she 
tried to figure out how she was going to pay for the 
antibiotic. That is why, when I got up here 9 1/2 years ago, 
the first thing I did was go to the FTC, will you please look 
at the vertical integration that exist in the drug pricing 
chain. Finally, 2 years ago, they started doing that.
    All of you are familiar with the 6(b) study and familiar 
with the interim report that came out? Mr. Joyner, are you 
familiar with it? Did you have a chance to read it?
    Mr. Joyner. I am familiar, and, yes, I have read it.
    Mr. Carter. Dr. Kautzner?
    Dr. Kautzner. Congressman, we----
    Mr. Carter. Are you familiar with the report, and have you 
read it?
    Dr. Kautzner. I am familiar with it, and we strongly 
disagree with it.
    Mr. Carter. Have you read it?
    Mr. Kautzner. I have read it.
    Mr. Carter. OK. Dr. Conway?
    Dr. Conway. Yes.
    Mr. Carter. You have read it and you are familiar with it?
    Dr. Conway. Yes.
    Mr. Carter. Mr. Joyner, does CVS Caremark, in any way, 
steer patients toward their own pharmacy? Yes or no.
    Mr. Joyner. So, as we mentioned earlier----
    Mr. Carter. Yes or no. Do they steer patients toward their 
own pharmacy?
    Mr. Joyner. We do not steer patients. We provide options to 
our customers.
    Mr. Carter. OK. Dr. Kautzner?
    Dr. Kautzner. Our clients make their benefit design 
decision, and they----
    Mr. Carter. No. Yes or no? No. I am going to take that as a 
no. Dr. Conway?
    Dr. Conway. No.
    Mr. Carter. No. Are you familiar with the report saying 
that there is evidence that the FTC has that the three major 
PBMs in this country--your three companies--are steering 
patients toward their own pharmacy? Are you familiar with that 
being in the interim report in a 6(b) study? Mr. Joyner?
    Mr. Joyner. I certainly read that, but I do not agree with 
the findings.
    Mr. Carter. OK. Dr. Kautzner?
    Dr. Kautzner. Congressman, the interim report is full of 
prejudgments. It lacks any economic, empirical, or data 
analysis.
    Mr. Carter. Are you familiar with what they say and 
steering?
    Dr. Kautzner. I am familiar with what they said.
    Mr. Carter. Yes.
    Dr. Kautzner. And we have provided over 3.3 million pages 
of documents and would implore the FTC to do what they 
committed to do, which is a wholesome review of all the data.
    Mr. Carter. And let me assure you, they are doing it. Dr. 
Conway, are you familiar with it?
    Dr. Conway. Yes, and we provide----
    Mr. Carter. And you still deny it?
    Dr. Conway. And we provide choice to our clients in their 
pharmacy network design.
    Mr. Carter. Look, guys, you are not talking to somebody who 
does not know what is going on. I signed those contracts with 
the PBMs as the owner of Carter's Pharmacy. I know what they 
say. I know how I am limited. The first bill I got passed up 
here was the right for the pharmacist to tell the patient if 
they paid cash, that it would be cheaper than their insurance 
because you had a gag clause in there that said that the 
pharmacist could not tell the patient that it would be cheaper 
if they paid cash for it. I was able to get legislation passed 
that changed that. There is only one word I know to describe 
this, and it is ``despicable.'' Mr. Chairman, I yield back.
    Chairman Comer. The gentleman yields back. The Chair now 
recognizes Mr. Lynch from Massachusetts.
    Mr. Lynch. Thank you, Mr. Chairman. First of all, I want to 
thank the Chairman and the Ranking Member for putting this 
hearing together, and I want to echo, associate myself with the 
remarks of Mr. Carter about the refreshing opportunity to work 
across the aisle with him and others on this problem.
    I am the former Chairman of the Subcommittee on Federal 
Workforce on this Committee. And I can go back to the year 2005 
when we looked at what was happening with pharmacy benefit 
managers in prescription drug pricing under the Federal 
Employees Health Benefit Program. Now, this is the gold 
standard among affordable health insurance programs--it covers 
8 million Federal employees and retirees and family members, so 
this is one of the biggest and best funded because you have got 
8 million people paying into it. Our investigation revealed 
that the Federal Employee Health Benefit Plan was regularly 
paying up to 45 percent more for its prescription drugs than 
other Federal programs, including those administered by the 
Department of Veterans Affairs and the Department of Defense.
    The single primary reason for the inflated cost of 
prescription drugs was that, contrary to other Federal 
programs, the Federal Employee Health Benefit Plan did not 
negotiate or regulate drug prices for employees and enrollees. 
Instead, the programs relied on pharmacy benefit managers, 
PBMs, to negotiate prescription drug benefits and maintain 
affordable prices. So, here is how bad it was. At the time we 
were doing this, CVS had a program where any person off the 
street could come in, and for $10, they could gain access to 
the CVS Caremark Program. So, someone off the street could walk 
in and pay $10 and get their drugs at a fixed price. In 
contrast, any of the 8 million people who were paying into the 
Federal Employee Health Benefit Program was paying 45 percent 
more--45 percent more--than the person with no insurance.
    So, think about this. If I am one of the 8 million 
employees or enrollees that are paying into their insurance 
program, they would be better off putting their union card in 
their shoe, walking in off the street without insurance, they 
would get a better deal than the PBM was getting them for their 
plan. So, in other words, the person with insurance under the 
Federal Employee Plan was paying $200 more for the drug than 
the person walking in off the street. That is just absolutely 
ridiculous. The PBMs were harming the very people they were 
meant to protect, the people that they actually had a contract 
to provide affordable drugs for. This has to stop. This has to 
stop.
    Back when we tried this before, PBMs were spending their 
money all around the Hill, and unfortunately, spinning a story 
that was not factual, and that won over some of my colleagues, 
and we were not able to get that bill to move. I just hope 
that, Mr. Chairman, with your leadership and the Ranking 
Member's leadership and my brothers and sisters across the 
aisle, let us work together on behalf of America today. Let us 
put all the other stuff aside and fix this problem. It is far 
too long in coming. Thank you, and I yield back.
    Chairman Comer. The gentleman yields back, and I agree and 
will make that pledge. The Chair now recognizes Mrs. 
Harshbarger from Tennessee.
    Mrs. Harshbarger. Thank you, Mr. Chairman, and I thank the 
gentlemen for being here today.
    First of all, I want you to know, I have been a pharmacist 
for 37 years, and I know firsthand how pharmacy benefit 
managers maneuver, honestly, to put financial screws to 
independent pharmacists and community pharmacies, and I have 
worked in every area of pharmacy except nuclear. So, that 
includes hospital, that includes retail, home health, hospice, 
the whole nine yards, and I have lived that experience, being 
an independent pharmacy owner. You know, what happens is, when 
you have PBMs to do these things, it leads to increased drug 
prices by steering prescription drug coverage to whatever pads 
your bottom line, and the case in point is the FTC interim 
report that just came out.
    But before I get into that, I want to ask you a question. 
This is really just a ``yes'' or ``no'' question. The Centers 
for Medicare and Medicaid Services issued an FAQ during the 
COVID public health emergency stating it was a Medicare Stark 
violation if a medical practice delivered a drug to a patient, 
and that during the public health emergency, there were Stark 
waivers in place which have now expired with the end of the 
public health emergency. For the record, I ask each one of you 
if you have had any communications with CMS that prompted this 
FAQ or related to it in any way? And if so, what was the 
communication? Starting with you, Mr. Joyner.
    Mr. Joyner. Yes. I am not familiar with what you asked.
    Mrs. Harshbarger. OK.
    Dr. Kautzner. Congresswoman, I am not aware of what you 
just asked.
    Mrs. Harshbarger. OK.
    Dr. Conway. Not that I am aware of.
    Mrs. Harshbarger. Thank you. Now, Mr. Kautzner, we have had 
the findings of numerous independent studies and the findings 
of the July 9 FTC interim report, and it is well documented 
many times over that certain medicines get marked up by 
thousands of dollars per prescription when they tend to flow 
through pharmacies owned by the same parent company as the PBM 
setting the prices. And per the FTC interim report, it states 
PBMs are paying their affiliated pharmacies up to 40 times 
average acquisition costs or more.
    And there is an internal document, if you have read the FTC 
interim report, that says, an executive of one PBM stated in 
internal documents, ``You can get imatinib at a non-preferred 
pharmacy like Costco for $97, at Walgreens, which is a 
preferred pharmacy, for $9,000, and at preferred home delivery 
for $19,200.'' And it goes on to say, ``We have created planned 
designs to aggressively steer customers to home delivery where 
the drug cost is 200 times higher.'' The optics are not good.
    So, my question to you is, how can the American public 
trust PBMs when they have done nothing to help with the pricing 
behaviors, and then you interfere with the clinical 
decisionmaking process as well with physicians, with prior 
approvals and things like that, how can American public ever 
trust what the pharmacy benefit managers are doing?
    Dr. Kautzner. I appreciate the question, Congresswoman. So, 
each and every day, we process millions of prescriptions. On 
every one of those prescriptions, we perform 18,000 safety, 
quality----
    Mrs. Harshbarger. Well, I know that. Believe me, I have 
read the report.
    Dr. Kautzner. And within 1 second, we are able to do 
determination. We are going to prevent 100 million potential 
medication errors just this year alone.
    Mrs. Harshbarger. OK. I am going to the next question. We 
are going to talk about 340Bs. I would like to ask each of the 
witnesses a yes or no. Does your company profit off of its 
involvement in the 340B drug discount program? Yes or no. Mr. 
Joyner?
    Mr. Joyner. The 340B marketplace today is an issue with our 
customers because the manufacturers are only paying----
    Mrs. Harshbarger. Well, do you profit or not? It is a 
``yes'' or ``no.''
    Mr. Joyner. We do participate in the 340B program, yes.
    Mrs. Harshbarger. So, I would assume you do, Mr. Kautzner?
    Dr. Kautzner. So, the Cigna Group does have pharmacies that 
will participate in a 340B program, as do many pharmacies 
across this country.
    Dr. Conway. We also have areas and customers where we 
participate in 340B.
    Mrs. Harshbarger. Well, this is what I would like for you 
to do is report back to the Committee, give me a rough estimate 
of how much money your company collects due to its involvement 
in the 340B program, and we would appreciate you following up 
with Chairman Comer with that information. And I or one of my 
colleagues can submit a written question for the record.
    Mrs. Harshbarger. Mr. Joyner, we have seen disclosures from 
your company, the fourth-largest for-profit company in the 
country, warning investors that any reduction in 340B contract 
pharmacy arrangements could materially and adversely affect the 
company. And I find this confusing and alarming because the 
340B discount program is intended to support safety net clinics 
and low-income patients, the underinsured or the uninsured. So, 
can you please explain exactly how this Federal safety net 
program became such a large part of your company's bottom line 
that you felt the need to inform investors that your profit 
would be negatively impacted by changes to the 340B program?
    Mr. Joyner. So, Congresswoman, as you know, the 340B 
program has changed over the last several years. We actively 
participate with health systems to help support their 340B 
programs. We do have pharmacies that participate within, as a 
contract pharmacy, with those----
    Mrs. Harshbarger. Well, why would an independent pharmacy 
get a contract and it says this is your reimbursement rate if 
the 340B stays in place, and this is your reimbursement rate if 
it does not, if we negate it in Congress?
    Mr. Joyner. No. I think if you look at the change in the 
340B laws, the amount of or the activity of contract pharmacies 
shrunk or contracted based off the interpretation of a recent 
court ruling. So, as a result, the narrowing of the 340B----
    Mrs. Harshbarger. Well, they found a way to rake the system 
is what it amounts to, and it is not just the pharmacies. It is 
some of the hospitals as well, and I think you need to relook 
at the 340B program and how you are abusing that program. And I 
know that my time is up, Mr. Chairman, but let me say this. 
Celeste Maloy, Representative Maloy from Utah, was here and she 
waited over an hour and she has a 2 p.m. hearing. And I just 
want you to know that we will be working with her in finding 
solutions for this. So, with that, I yield back, sir.
    Chairman Comer. The gentlelady yields back. The Chair 
recognizes Mr. Auchincloss from Massachusetts.
    Mr. Auchincloss. Thank you, Chairman. Long day, gentlemen, 
almost over. All three of your companies are part of the 
Pharmaceutical Care Management Association. Is that correct? 
Yes? And I see the PCMA is here today as well. The PCMA 
responded to the FTC's interim report with a statement that 
said, amongst other things, that the report is based on 
anecdotes and comments from anonymous sources and self-
interested parties. The PCMA said the report was supported only 
by two cherry-picked cases. PCMA said the report completely 
overlooks the volumes of data that demonstrate the value that 
PBMs provide. Do any of you three want to disassociate yourself 
from those comments about the FTC report or do you stand by 
those?
    Mr. Joyner. We stand behind them.
    Mr. Auchincloss. We stand behind them. I found the FTC 
report compelling. I found it also to be supported by excellent 
investigative reporting by the New York Times, by the Wall 
Street Journal, by a recent report from 3 Axis Advisors 
examining Washington state employer data, by a June 2023 MedPAC 
report that found that payments were likely to be highest to 
pharmacies that are affiliated with the PBM prescription drug 
plan, while non-vertically integrated pharmacies were most 
likely to receive the lowest payments. I thought that the 
evidence fact pattern was quite strong.
    But given the claims of PCMA, and, in particular, Mr. 
Joyner, the claims that CVS has made about TrueCost, I decided 
to do my own investigation in Massachusetts. I got access to a 
Fortune 500 employer's data in Massachusetts and looked at 
their benefits, which are administered by CVS, and this data 
here is not anecdotal. This is CVS' own data for an employer 
based in Massachusetts. I am going to throw out two prices for 
each drug name, and I want you to guess, Mr. Joyner, which drug 
is the price CVS charges the employer and which drug is the 
NADAC price. And I wish that one of the pharmacists in the 
audience here could help me with these drug names, but we have 
got teriflunomide, which is used to treat multiple sclerosis. 
It is priced at $6,229 or $16. Which one do you think is the 
CVS TrueCost, and which one is NADAC?
    Mr. Joyner. If it were the TrueCost price, it would be the 
lower.
    Mr. Auchincloss. Well, that is interesting because the 
answer is the CVS price is $6,229 and NADAC is $16. That is a 
38,000-percent markup. Abiraterone acetate is used to treat 
cancer, and is priced out at $91 or $5,800. Which one is the 
CVS price, do you think?
    Mr. Joyner. If that client has adopted the TrueCost pricing 
model, it would be the lower.
    Mr. Auchincloss. We have the CVS price of $5,800, NADAC at 
$91. That is a $6,300-percent markup. I can keep going. We have 
got prostate cancer 6,000 percent above NADAC. We have got 
leukemia, 13,000 percent above NADAC; chronic kidney disease, 
5,000 percent above NADAC; HIV, 4,000 percent above NADAC; 
heart failure, a modest 161 percent markup above NADAC. These 
are not aberrations, Mr. Joyner. These are not anecdotal. This 
is your data in my home state. And while specialty drugs may be 
used by less than two percent of the U.S. population, they 
account for over 50 percent of the drug spent.
    So, if there is any cherry-picking going on, it is not by 
the FTC, regardless of what PCMA says. It is by the Big PBMs. 
You are cherry-picking drugs to apply them to specialty rates 
at specialty formularies. There is a clear pattern of marking 
up drugs used to treat the sickest patients, and you are 
marking these drugs up and filling them disproportionately at 
your pharmacies through steering. These kinds of markups are 
anticompetitive. They should be illegal. And that is why, along 
with my colleague from Tennessee, Mrs. Harshbarger, we 
introduced today the Pharmacists Fight Back Act, which will 
stop these markups, patient steering, the patient exploitation 
in Federal healthcare plans and impose criminal violations for 
such behavior. No more exploiting the sick. No more drugs being 
priced thousands of percentage points above NADAC, as I just 
listed here, and steered to your affiliated pharmacies. No more 
underwater reimbursing independent pharmacies or imposing 
point-of-sale and retroactive fees. These practices must stop. 
Transparent pricing and patient choice should be our north 
star.
    Dr. Kautzner, in my remaining time, I do want to pivot and 
ask you about Ascent, the GPO that you have domiciled in 
Delaware but operating in Switzerland. Switzerland is an 
interesting place to be operating. You do not have any plan 
sponsors there. The Ohio attorney general thinks that you are 
doing that because you are trying to engage in anticompetitive 
behavior. Can you attest here under oath that every action 
being undertaken in Switzerland would be legal under U.S. 
competition law?
    Dr. Kautzner. Congressman, Ascent Health Services is a 
healthcare group purchasing organization around commercial 
rebates. We have multiple owners within that organization.
    Mr. Auchincloss. But can you attest that everything that is 
happening in terms of sharing information about rebates, 
sharing information about negotiations, everything that is 
happening in Switzerland, would all of that be legal under U.S. 
law?
    Dr. Kautzner. Congressman, I am neither an attorney nor an 
expert on Ascent Health Services, so that is not a question I 
could answer.
    Mr. Auchincloss. Will you commit to following up with my 
office to determine whether or not every action that is taking 
place in Switzerland would be legal, or whether Attorney 
General Yost is correct that it is, in fact, a way to sidestep 
U.S. antitrust law?
    Dr. Kautzner. Congressman, we can certainly take that back 
and review your question and get back to you. Thank you.
    Mr. Auchincloss. I will now yield my time to Ranking Member 
Raskin.
    Mr. Raskin. Thank you, Congressman Auchincloss, and thank 
you for your leadership on this. I am definitely getting on 
your bill with Congressman Carter, and I appreciate your 
joining us today. I had to leave the room before when 
Congressman Frost was discussing the matter of compensation, as 
Congressman Auchincloss just pointed out. There is huge profits 
being raked in on this business, and we want to know where the 
money is going. Dr. Conway, what was your compensation? I am 
sorry, I was not in the room when this happened. Did you state 
what your compensation is?
    Dr. Conway. I was the only one to answer the question. My 
base salary is $950,000. I believe the question was total 
compensation.
    Mr. Raskin. Total compensation is how much?
    Dr. Conway. Total last year was a little north of $4 
million.
    Mr. Raskin. Four million. OK. And Dr. Kautzner, how about 
you?
    Dr. Kautzner. So, Ranking Member Raskin, the Cigna Group 
reports our top five highest-paid executives in our annual 
report. I am not one of them. I would be happy to followup with 
you offline.
    Mr. Raskin. That is too bad, but what was your compensation 
last year? Not the top five.
    Dr. Kautzner. As I said, I would be happy to followup with 
you offline.
    Mr. Raskin. Well, all right. Chairman Comer, what was your 
compensation last year as the United States Congressman?
    Chairman Comer. Same as yours, $174,000.
    Mr. Raskin. A hundred seventy-four thousand dollars. 
Congressman Sessions, how much did you make as a Congressman 
for the U.S. House of Representatives last year?
    Mr. Sessions. I am half paid. I retired and came back. So, 
half is about a pension of 22 years, and then half is the 
remaining. So, I am trying to be honest about that.
    Mr. Raskin. Yes. I was not aware of that particular 
mechanism.
    Mr. Sessions. Yes. They net you. I can make no more than 
$174,000, but half of it was pension from serving 22 years.
    Mr. Raskin. I got you, but your take-home would be 
$174,000.
    Mr. Sessions. I am not allowed a penny more.
    Mr. Raskin. Well, thank you for laying that all there out 
in public.
    Mr. Sessions. Well, you asked.
    Mr. Raskin. Dr. Kautzner did not want to do that. Mr. 
Joyner, how much was your compensation last year?
    Mr. Joyner. So, CVS Health published the top five, and I am 
not part of the top five compensated employees.
    Mr. Raskin. All right. What was the bottom five of the top 
five at your company?
    Mr. Joyner. I am not aware.
    Mr. Raskin. What was the top one of the top five?
    Mr. Joyner. I think as reported earlier, I think it was 
$20-plus million for our CEO.
    Mr. Raskin. Twenty million dollars was the highest paid 
person?
    Mr. Joyner. That was what was reported earlier.
    Mr. Raskin. OK.
    Mr. Joyner. I can certainly confirm that.
    Mr. Raskin. All right. Well, there is a lot of money being 
made out there, and a lot of pain and a lot of hardship. And 
your companies are taking a huge chunk of money out of an 
already staggeringly expensive and inefficient system, a system 
so convoluted that most people do not even know that your 
companies exist. And so, a lot of people are profiting from the 
opaqueness, the complexity, the convolution of this healthcare 
system, and we really have got to clean it up. And I wish that 
you guys would be part of the solution to help people 
understand instead of part of the problem.
    The FTC interim report said that not all the companies had 
complied fully with their request for information and 
documents. Mr. Joyner, has CVS Caremark produced all of the 
responsive documents to the FTC? And you are under oath.
    Mr. Joyner. We believe we are in full compliance. Multi-
terabytes of data and millions of pages of documents that we 
believe were in compliance and on time with the FTC request.
    Mr. Raskin. So, you have produced all responsive documents? 
Everything they have asked for, you have produced?
    Mr. Joyner. We believe we have produced what has been asked 
and requested.
    Mr. Raskin. OK. Mr. Kautzner, how about Express Scripts?
    Dr. Kautzner. So, we have supplied, from what I am told, 11 
billion data points, 768 million rows of data, over 3.3 million 
pages.
    Mr. Raskin. OK. I got you. Yes, those are all big numbers.
    Dr. Kautzner. We would implore the FTC, implore them to 
actually review all of that data, and we believe that----
    Mr. Raskin. That is up to them, Dr. Kautzner. I have such a 
simple question. Have you produced all responsive documents? 
Have you turned over what they have asked for?
    Dr. Kautzner. As I said, I know we have supplied 3.3 
million pages of documents. I am not aware----
    Mr. Raskin. Let us say it is 87 zillion. That is not my 
question.
    Dr. Kautzner. I am not aware----
    Mr. Raskin. My question is, have you produced everything 
that has been requested?
    Dr. Kautzner. I am not aware of every request and was not 
involved in the turning over, though, so that is a question we 
would have to get back with you on.
    Mr. Raskin. So, you do not know. Your answer is you do not 
know. OK. And Dr. Conway, has Optum Rx produced all responsive 
documents to the FTC's request?
    Dr. Conway. Yes, I believe we have been fully compliant 
with the FTC request.
    Mr. Raskin. OK. I am over my time. Thank you, Mr. Chairman. 
I will go back to you.
    Chairman Comer. The gentleman yields back. I just would 
like to ask unanimous consent to enter the following documents 
into the record: The Committee's report of PBMs dated December 
10, 2021; the Federal Trade Commission's interim staff report 
on PBMs; a letter from the National Association of Chain Drug 
Stores and the National Community Pharmacists Association; a 
letter from the Association of Accessible Medicines, a letter 
from the 60 Plus Association; a letter from the PBM 
Accountability Project; a letter from a coalition of pharmacy 
and pharmacist organizations; a statement from Patients Rising; 
report by American Pharmacy Cooperative, Inc., a letter from 
the National Association of Manufacturers; and a statement from 
the National Association of Chain Drug Stores President and 
CEO.
    Without objection, so ordered.
    I want to thank our witnesses for being here today. I know 
it was a long hearing. I apologize we had to take a brief 
recess for House floor votes.
    Ranking Member, is there anything else you wanted to add 
before the end?
    Mr. Raskin. Yes, just one or two things. First of all, I 
want to thank you, Mr. Chairman, for two excellent hearings in 
a row, Monday and Tuesday. We have had a great week so far in 
terms of our ability to try to penetrate governmental or 
corporate bureaucracies that seem to be indifferent to a clear 
public interest. And I learned a lot from this hearing, I have 
got to say, and it is disappointing to me to learn about so 
many abuses taking place inside this system, and so we should 
act on this, Mr. Chairman. Again, we had clear bipartisan 
consensus here, that this kind of profit taking at the expense 
of patients, which is what the healthcare system should be all 
about, is really unsustainable, and we hear about it from our 
constituents all of the time.
    I understand that is not the principal concern of our 
witnesses today, despite the protestations that their goal is 
to save cost. No. Their goal is to make money as corporations. 
That is the way the system is really operating, and that is 
fine. That is what they are doing, but we have got to protect 
the American people, and I hope we can act together to really 
try to reduce costs and make sure that everybody in America can 
get the prescription drugs that they need at an affordable 
price. I will yield back to you, Mr. Chairman.
    Chairman Comer. The gentleman yields back, and I agree and 
look forward to working with you on that. I have also been in 
communication with Brett Guthrie, who I believe has a good 
chance at being moving up in the Energy and Commerce Committee 
in the future. And this is something that we are going to have 
to work closely with the Energy and Commerce Committee on 
because they have primary jurisdiction over a lot of what needs 
to be done. We had two Members from Energy and Commerce here 
today, Mrs. Harshbarger and Mr. Carter. They are both experts 
on the issue, and I am sure there are some members on your side 
of the aisle that are on Energy and Commerce as well.
    In closing, I am a little disappointed in some of the 
witness testimony today, especially the fact that you all claim 
to be transparent. Instead, you have created group purchasing 
organizations or rebate aggregators in foreign countries, like 
Ireland and Switzerland, which I can assure you is the hardest 
country on the planet. That is not a third-world country to get 
any type of financial information, and pharmaceutical companies 
in Ireland and the Cayman Islands to evade taxes and 
congressional regulatory efforts. You refused to answer 
questions posed by members on both sides of the aisle. The book 
is still open about your testimony with respect to your 
relationship with independent pharmacies. That one was hard to 
believe. You pointed the finger at manufacturers, even though 
PBMs are the center of the problem. You have taken no ownership 
of your action to roll in the rise of prescription drug cost.
    We get elected by our constituents. In my district, I have 
740,000. How many do you have in your district, Mr. Raskin?
    Mr. Raskin. Seven-hundred-and-ninety-four-thousand.
    Chairman Comer. Yes, 794,000. So, we all represent probably 
between 700,000 and 900,000 people, and one of the biggest 
issues is the rising cost of prescription drugs, and that is a 
bipartisan issue. And there are not many things that are 
bipartisan in this town, unfortunately, especially on this 
Committee, but this Committee is in agreement that PBMs need to 
be reformed.
    Now, we have passed bills in Congress and state 
legislatures are passing bills increasing transparency. But as 
we mentioned throughout the hearing, there are things that you 
do to evade transparency, much like going to foreign countries. 
We believe that some of these transparency bills are a lot like 
a resolution. You pass a resolution, and when you go back and 
say we did something to keep people off, but as resolution 
really does not do anything.
    We need real reform. I disagree with some of the things 
that were stated by people across the aisle. I am a free market 
guy. I am all about making a profit. I think that risk takers 
should be rewarded for making a profit. Drug companies take 
significant risks. They invest in research and development. I 
do believe that they should be rewarded for that risk. If they 
are not rewarded for the risk, I do not believe we will be ever 
discovering new medicines and new vaccines because there is no 
incentive to discover new medicines and new vaccine.
    The PBMs were created to help drive down cost of 
prescription drugs. I do not think that is working. There are 
always going to be examples where you reduce the cost of 
prescription drugs, but overall, we have too many horror 
stories from pharmacists. We have too many horror stories from 
consumers about where they were gouged by the PBMs. And that is 
not what the PBMs were created for, and I do not believe the 
PBMs were created to be vertically integrated. I think that is 
a huge issue. And I do not know what our solution is for the 
PBMs. I would certainly support busting up the PBMs. I do not 
think a PBM should be owned by a health insurance company. I do 
not think a PBM should own a pharmacy, at the very least.
    So, I think we are going to have many more discussions. We 
do a good job on this Committee of messaging. I think this 
report is excellent that we released today. We are going to 
continue to work and try to find a solution to the problem, and 
it is a problem. It is a problem, and we represent our 
constituents who demand that we do something about the problem. 
So, again, I want to thank you all for being here.
    With that and without objection, all Members have 5 
legislative days within which to submit materials and 
additional written questions for the witnesses, which will be 
forwarded to the witnesses.
    Chairman Comer. If there is no further business, without 
objection, the Committee stands adjourned.
    [Whereupon, at 2:33 p.m., the Committee was adjourned.]

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