As a reminder, the U.S. House of Representatives Committee on Oversight and Reform previously found, in a 2021 report, that PBM-negotiated rebates are not correlated with the list prices set by drug companies. The report also finds that “drug companies have raised prices relentlessly for decades while manipulating the patent system and other laws to delay competition from lower-priced generics.”

The report includes the following key takeaway quotes:

• “The Committee’s investigation shows that uninhibited price increases have fueled corporate profits and executive compensation and that drug companies raise prices in order to meet revenue targets. Data obtained by the Committee undermines claims by the pharmaceutical industry that rebates provided to PBMs are the primary driver of price increases.”

• “All the companies the Committee investigated have employed anticompetitive strategies to suppress generic competition.”

• “Documents obtained by the Committee further show that, despite their public claims, executives internally acknowledged that their companies’ price increases cannot be entirely attributed to growing rebates or discounts provided to PBMs, health insurance plans, or other payers. In addition, documents show that PBMs secured contractual provisions that disincentivized drug companies from raising list prices. Without those provisions secured by PBMs, drug companies likely would have raised list prices more.”

• “Pharmaceutical companies often attribute list price increases to the need to account for rebates, discounts, and other fees provided to other supply chain actors. However, internal data from the drug companies in the Committee’s investigation refutes these industry claims. As companies raised prices on their drugs, internal data shows that net prices – prices after accounting for all discounts and rebates – also increased for most of the drugs.”

The 2021 report affirms that drug companies are the root cause of high prescription drug prices, and despite what Big Pharma wants you to believe, rebates are not correlated to high drug prices. A new report from health policy researcher Alex Brill, founder and CEO of Matrix Global Advisors (MGA) and former policy director and chief economist for the U.S. House Committee on Ways and Means, “Rebates and Drug Price Increases: An Analysis,” found that prescription drugs with the largest list price increases do not have rebates.

Another analysis using Centers for Medicare and Medicaid Services (CMS) data of the top 250 brand-name drugs in Medicare Part D by total spending in 2020 confirmed that price increases from big drug companies are unrelated to rebates.

Drug companies are pushing for policies, including so-called “delinking” proposals, that ban pharmacy benefit companies from being able to share in the rebates they secure from drug companies. “Delinking” would increase spending for patients and families, and only reward drug companies. Specifically, analysis finds that Big Pharma profits would increase $32 billion in the Medicare Part D and commercial health insurance markets, while increasing patient premiums in those markets nearly $40 billion annually.

Read the full House Oversight Report HERE.

___________________________________

See more on the MGA report HERE.

Learn more on how rebates are uncorrelated to high list prices HERE and how most prescriptions actually do not have rebates HERE.

Read about the costly implications of “delinking” legislation HERE.

###

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 275 million patients. Learn more at www.pcmanet.org