At a recent Federal Trade Commission (FTC) public listening session on “Lowering Americans’ Drug Prices Through Competition,” policymakers, academics, and industry leaders gathered to evaluate key drivers of high prescription drug costs. Several speakers emphasized the essential role that pharmacy benefit managers (PBMs) play in driving affordability, negotiating lower prescription drug costs, and improving access for patients.

Stacie Dusetzina, professor of health policy and an Ingram Professor of Cancer Research at

Vanderbilt University School of Medicine, Department of Health Policy, highlighted the value that PBMs deliver in protecting plan sponsors and consumers from rising drug costs and the importance of rebates:

“Pharmacy benefits managers have historically played a very important role in drug price negotiation and formulary benefit design on behalf of health plan employers, so their value for that role is quite clear. Without PBMs, it is likely Americans would pay more for their medications than they currently do…It’s important to recognize that rebates do lower overall spending on prescription drugs, so we should value rebates that are negotiated.”

Professor Dusetzina also cautioned against policies that undermine the negotiating leverage PBMs use that keeps drug prices set by drug companies in check:

“If you create policies that mandate coverage of specific drugs or mandate fixed cost sharing for example, that can actually harm the ability of PBMs to negotiate successfully for prescription drugs.”

Tim Dube, senior vice president for policy and regulatory insights, PCMA, explained how PBMs have evolved into indispensable cost-saving partners for health plans, employers, and government programs:

“PBMs are the only part of the drug supply chain that is in your corner working hard to save you money PBMs are hired by plan sponsors to do many things to control the cost of drugs. Any argument that PBMs do the opposite and raise drug costs is simply implausible. If it were true, no one would hire a PBM. PBMs and the services they offer today emerged as a direct response to rising drug spending and anti-competitive behavior on the part of drug companies. For years, drug companies have leveraged their monopoly pricing power for brand-name drugs to set high prices and block generic and biosimilar competition… PBMs are the sole counterweight to drug company pricing power.” 

Kathleen Jaeger, president and CEO of MedSecurian, a consulting firm, and the founder and CEO of the Center for American Medicine Resiliency, underscored the need for greater biosimilar uptake to help lower prescription drug costs and highlighted what regulators can do to spur more competition in the marketplace:

“Ultimately, what needs to happen is that interchangeability needs to be reformed. There is legislation on the Hill right now and what that reform needs to do is be pure and clean and free of bio and pharma edits. We can do that. We will see a lot of great uptake across the United States … Stop and think of why do we have 118 bioproducts out there today that only have less than 10 percent of the competition coming in? It’s because the hurdles are so high and the market’s not there. We’re not going to get the cost savings unless we fix the system and it’s been 15 years, it shouldn’t take another five, 10 years. It really should be done now.” 

Dube echoed Jaeger’s comments and reiterated the PBM industry’s support for a more robust biosimilar marketplace:

“Many people who take biosimilars or biologics are on them for life or for a long period of time…. Prescribers and patients have both shown hesitancy in surveys on switching from biosimilars from the reference products. Some of this is honestly effective messaging by the brand drug industry about the safety issues related to the biosimilars, which is just not true. The FDA interchangeability designation in the BPCIA is also an unnecessarily high barrier…

“So first, I’d like to associate myself with Kathleen’s excellent, eloquent remarks on the interchangeability designation and the folly of that thing’s existence. That needs to go, number one.”

Learn how PBMs continue to innovate to lower health care costs and improve access HERE and how the list price of drugs set by drug companies is the root cause of high drug prices HERE.

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PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 289 million patients.