[Congressional Record Volume 167, Number 192 (Tuesday, November 2, 2021)]
[House]
[Pages H6079-H6080]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                PHARMACY BENEFIT MANAGER ACCOUNTABILITY

  The SPEAKER pro tempore. The Chair recognizes the gentlewoman from 
Tennessee (Mrs. Harshbarger) for 5 minutes.
  Mrs. HARSHBARGER. Mr. Speaker, one of the top concerns for Americans 
is the high cost of prescription drugs. Congress must do something to 
lower these prescription drug prices. We know the American people want 
lower prices, but they don't want to sacrifice access to lifesaving 
treatments.
  Prior to representing the great people of east Tennessee in Congress, 
I served for 35 years as a community pharmacist, so I know a thing or 
two about safeguarding patient access to affordable medicines and 
solving patient problems.
  We absolutely need to reform the ways pharmaceutical manufacturers 
price their products and sometimes manipulate the system. But there is 
another part of the drug pricing equation that doesn't get nearly as 
much attention, and that is the role of the pharmacy benefit managers, 
or PBMs, their lack of transparency, their market dominance, and the 
effects of their business practices on drug prices and patient choices.
  PBMs were created as middlemen to reduce administrative costs for 
insurers, validate patients' eligibility, administer plan benefits, and 
negotiate

[[Page H6080]]

costs between pharmacies and health plans. But they have morphed into 
one of the most highly concentrated and least accountable profit 
centers in the healthcare industry. Over time, these PBMs have been 
allowed to operate and consolidate their market powers virtually 
unchecked.
  Medicare, Medicaid, and commercial health plans all use PBMs to 
manage drug benefits. That is more than 260 million American lives.

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  These pharmacy benefit managers wield enormous power as middlemen on 
numerous fronts. They choose what drugs are covered and not covered by 
insurance; they negotiate purchasing deals with drug makers; they 
determine copays for consumers; they decide which pharmacies are 
included in prescription plans and which are not; they decide how much 
pharmacies are reimbursed for the drugs they sell, where, by the way, a 
lot of pharmacies dispense drugs to a patient, and they are reimbursed 
less than what they paid for the drug.
  In 2020, the top six PBMs handled more than 95 percent of total U.S.-
equivalent prescription claims. Curiously, this market power 
concentration and vertical integration with the insurance carriers was 
allowed by our Federal Trade Commission over the last 15 years, the 
very agency whose mission it is to safeguard Americans from 
concentrated corporate power.
  What are the effects on drug spending? Between 2015 and 2018, nearly 
half of the increase in total brand drug spending went to payers, 
including PBMs, according to an analysis from Berkeley Research Group.
  Such a huge slice of yearly drug spending going to middlemen has 
catapulted the U.S. PBM market to be valued at more than half a 
trillion dollars, and that is with a ``T''. Analysts see PBMs 
continuing to prosper in the coming years.
  The virtually unchecked powers of PBMs have enabled them to: Number 
one, charge drug manufacturers hefty rebates for preferred placement on 
formularies. The higher the list price, the higher the rebates, but no 
one knows where these rebates go.
  Number two is to impose restrictive take-it-or-leave-it contracts 
with community pharmacists.
  Number three is charge community pharmacies outrageous clawbacks or 
DIR fees, often totally unpredictable, where PBMs claw back or take 
back moneys they have already reimbursed pharmacies, often weeks or 
months after a patient transaction. The typical community pharmacy now 
pays roughly $81,000 a year in DIR fees, making it all but impossible 
to set a budget for the future.
  These and other business practices happen in relative secrecy with no 
real oversight. No one is really able to follow the dollars on how and 
where the money flows; not the payer, not the pharmacist, and certainly 
not the patient.
  I have introduced bipartisan legislation, the PBM Accountability 
Study Act, H.R. 1829, which would have the U.S. Government 
Accountability Office study the roles PBMs play in drug pricing and 
spending, their market concentrations, and states of competition. My 
bill also requires GAO to make recommendations on lowering drug costs, 
improving transparency, and improving competition in the PBM industry. 
This is a commonsense, bipartisan bill, and I invite all of my 
colleagues to cosponsor and help with this important legislation.
  I sincerely hope we can work together to include the provisions of 
this bill and other PBM reforms in any drug-pricing legislation that we 
consider this year.

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