ICYMI: Senator Warren's Statement on Senate Finance Committee Legislation to Regulate Drug Middlemen
Senator Warren Calls for Additional Scrutiny on Manufacturer Gaming and Vertical Integration.
Washington, D.C. — At a Senate Finance Committee markup of the Modernizing and Ensuring PBM Accountability (MEPA) Act, U.S. Senator Elizabeth Warren (D-Mass.) submitted a statement for the record applauding efforts to regulate pharmacy benefit managers (PBMs) – corporate middlemen that manage drug benefits and pharmacy networks for insurance companies, while extracting exorbitant profits from every link in the chain. The bipartisan reforms will strengthen oversight of the prescription drug supply chain, increase pharmacy choice, and lower drug costs for patients.
Senator Warren called for additional reforms to prohibit the secretive tactics that drug manufacturers use to shut out competitors from formularies and keep drug prices high, while also expressing support for regulations in the Senate Finance Committee bill that would reveal the prevalence of these practices. In addition, the Senator highlighted how greater vertical integration in the drug supply chain hurts local pharmacies and restricts patient choice, and pressed lawmakers to crack down on these arrangements.
Statement: Finance Markup of Pharmacy Benefit Manager Proposals
U.S. Senate Finance Committee
Wednesday, July 26, 2023
Senator Warren: Too many Americans are rationing their medication and getting sicker because they cannot afford the life-saving drugs they need. I’m grateful to Chair Wyden and Ranking Member Crapo for advancing proposals that will rein in the power of pharmacy benefit managers, or P-B-Ms, and lower drug prices for the American people.
I want to talk about two proposals. First, this legislation will shine a light on the anti-competitive games that drug manufacturers use to preference high-priced drugs. In one egregious example, drug manufacturers offer kickbacks to PBMs for agreeing to disfavor a competitor’s drug. Let’s be clear: these tactics should be outlawed, but this legislation takes step in the right direction by requiring PBMs to disclose these arrangements.
Second, the legislation will look at how vertical consolidation affects drug prices. Today, the top three PBMs – which manage 80% of drug claims – are each owned by a giant health insurance company, which in turn also owns its own pharmacies. These conglomerates want to keep as much money in-house as possible, so they steer patients to use these PBM-owned pharmacies, squeezing out local options. I’m glad the Committee will direct OIG to study these arrangements, but I’ve called on regulators to end this kind of vertical consolidation – because the companies paying for health care services shouldn’t be the same entities providing those services.
I’m encouraged that the Committee will consider additional proposals on PBM steering and vertical integration, and I look forward to working with you on these policies to lower drug prices for Americans.
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