Lawmakers Converge on Pharmacy Benefit Managers Over Sky-High Drug Prices

On Tuesday, a rare and notable bipartisan consensus emerged on Capitol Hill as lawmakers from both major political parties united in their scrutiny of three prominent pharmacy benefit managers (PBMs) during a high-stakes oversight committee hearing. This convergence of views highlights the intensifying concern over the escalating prescription drug prices in the United States, a critical issue exacerbated by the operational practices of these influential intermediaries.

The House Committee on Oversight and Accountability convened to examine the role and practices of PBMs, a critical examination that follows the recent release of a highly critical report by the Federal Trade Commission (FTC). The FTC’s report accused these entities of amassing substantial profits by directing patients and employers towards higher-priced medications, thereby inflating overall drug costs. This scrutiny is particularly salient given that prescription drug prices have emerged as a significant concern for many Americans. A recent report from the Kaiser Family Foundation (KFF), a nonprofit organization dedicated to health policy research, revealed that approximately one-third of Americans struggle to afford necessary medications due to their prohibitive costs.

Rep. Kweisi Mfume, D-Md., drew attention to the tangible impact of these soaring drug prices on constituents, citing numerous accounts of individuals being forced to skip, delay, or forgo essential medications because of their exorbitant costs. This testimony underscores the growing disconnect between the intended role of PBMs and their actual impact on medication affordability.

In principle, PBMs are designed to reduce medication costs by negotiating discounted prices with pharmaceutical companies in exchange for including these drugs in insurance coverage formularies. However, the practical application of this principle appears to be more complex. The three dominant PBMs—CVS Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s OptumRx—together control approximately 80% of the U.S. market. This significant market share endows them with considerable influence over drug coverage and pricing decisions. Moreover, these PBMs are closely affiliated with major health insurance providers, adding an additional layer of scrutiny to their practices.

Adam Kautzner, president of Express Scripts, testified that drug manufacturers had increased prices on 60% of brand-name drugs in the past year. Despite this trend, Kautzner argued that Express Scripts had managed to save its members approximately $64 billion during the same period, suggesting that the PBM’s efforts are mitigating some of the adverse effects of rising drug prices.

Rep. Raja Krishnamoorthi, D-Ill., juxtaposed these claims with the concerns articulated by various stakeholders, including the FTC, leading media outlets such as The New York Times, and at least eight state attorneys general from both political parties. Krishnamoorthi highlighted the discrepancy between the PBMs' assertions of cost reduction and the widespread allegations of cost inflation.

Committee Chair James Comer, R-Ky., presented a pre-hearing report that identified 300 instances where the PBMs had favored higher-cost medications—sometimes $500 more per claim—over more affordable alternatives. Comer cited Suboxone, a medication used for opioid use disorder, as an example of the issue, noting that one PBM had listed the drug at 600 different prices. "You’re the problem," Comer asserted, accusing the executives of prioritizing more expensive medications and setting inconsistent prices across the country. He expressed frustration with the PBMs’ practices and their associated credibility issues, noting that numerous states are now pursuing legislative reform to address these concerns.

Dr. Patrick Conway, CEO of OptumRx, defended the PBM industry, asserting that PBMs play a vital role in the U.S. healthcare system by reducing costs for both patients and employers. Conway claimed that OptumRx delivers an average savings of over $2,000 per person annually and that PBMs collectively save the healthcare system approximately $145 billion each year. Additionally, surveys indicated that 97% of employers were satisfied with the services provided by PBMs, according to Conway.

David Joyner, president of CVS Caremark, supported similar claims, arguing that PBMs do not retain rebates or discounts but instead pass nearly all of them back to their members. Joyner emphasized that CVS Caremark transfers over 99% of rebates and administrative fees back to beneficiaries, with 100% of such transfers in the Medicare space.

Despite these defenses, committee members remained skeptical. They referenced investigative reports, media coverage, and ongoing FTC inquiries that present a less favorable view of PBM practices. Lawmakers criticized the executives for their perceived lack of transparency and responsiveness during the hearing.

By the end of the session, Chair Comer expressed his disappointment with the executives' testimonies, stating, “You have all claimed to be transparent. You have refused to answer questions from both sides of the aisle.” Rep. Jamie Raskin, D-Md., the committee’s ranking member, encapsulated the frustration felt by many, summarizing, “I feel like the more I hear, the less I understand.” This sentiment reflects a broader concern about the efficacy of PBMs in managing prescription drug costs and underscores the ongoing need for rigorous oversight and reform.