In case you missed it, last week’s RealClearPolitics’ virtual event, “The Consequences of Targeting Pharmacy Benefits,” featured policymakers and expert voices exploring the potential negative impact of policies being considered by Congress that target pharmacy benefit companies and market-based incentives in the pharmacy market.

See the event HERE

The event included Q&A sessions with former U.S. Senator Pat Toomey (R-PA) and U.S. Representative Eric Burlison (R-MO-07), and a robust panel of experts.

Former U.S. Senator Toomey explained the role of pharmacy benefit companies and how proposals would disrupt the market for the worse:

“If you are a consumer, if you have a health insurance plan, if you have prescription drug coverage with your plan, then chances are very good that you’re paying less for prescription drugs than you otherwise would because there’s a PBM involved that’s negotiating those lower prices.”

“For Congress to come in and say, ‘Oh, we’re going to disrupt this. And we’re going to disrupt it by making it much more difficult for one of the players in this supply chain to operate.’ I think that’s a big mistake.”

“I think it’s pretty straightforward. If you really, severely curtail the ability of PBMs to function, then you’re going to probably have higher prescription drug costs.”

U.S. Representative Burlison shared his own experience working with a pharmacy benefit company and how he saw the savings firsthand:

“My responsibility was to, every two years, review the contracts we had with the insurance carrier, and renew those contracts for the 100,000 lives that were represented in that insurance plan. I can tell you: we had an opportunity to pick which carrier, and we had an opportunity to pick a PBM or not to have a PBM. We had an opportunity if we wanted to customize it or design the PBM the way that we wanted to have it work as an employer, and it was the job of the PBM to carry out those rules and requirements on behalf of the employer. If the employers are not able to hire a PBM that’s able to carry out those functions, then, I’ll tell you, when it came to Missouri Consolidated, it saved each individual in their annual premiums thousands of dollars in savings. I’ve just seen firsthand the impact that hiring a PBM has.”

Panelists included Alex Brill, founder and CEO of Matrix Global Advisors (MGA), Ike Brannon, president of Capital Policy Analytics, and Maura Keefe, spokeswoman for the Coalition for Affordable Prescription Drugs (CAPD).

Alex Brill explained why drug companies are pushing policies to target pharmacy benefit companies:

“There is an effort by others in the supply chain to shift the conversation, you could say or point fingers, you might say, at PBMs and away from themselves…I think has two purposes. One is, as we’ve seen in the last few years…there’s been an array of attention towards the manufacturers and a lot of that culminated in the enactment of the Inflation Reduction Act with a set of policies to allow Congress to allow the executive branch to negotiate or mandate or dictate certain drug prices in the market and that concern has been brewing for a long time…So I think some of the dynamic here is an effort to shift the conversation away from the drug makers. And that’s a political desire on one level from that industry.

“There’s also a business case, I think, for the drugmakers here…One way to illustrate that, there was a policy proposal a regulatory proposal a few years ago called the Rebate Rule, which would have prohibited, in essence, prohibited rebates in Part D. And it was proposed during the Trump Administration, and ultimately did not go into effect. But the consequence of that proposal, if it had gone to an effect, would have been actually higher premiums for employers and more revenue for drugmakers…That specific policy is not in debate at the moment, but other policies that, in many regards, can mimic the economics of that proposal are being considered. And so there’s an opportunity, I think, from the manufacturers perspective to constrain PBMs’ flexibility to their benefit, to the benefit of the manufacturers. So it is the political of shifting the conversation: if nothing happens at least they have shifted the conversation away from themselves. If something does happen, there’s a potential for them to be beneficiaries.”

Brill also shared how so-called “delinking” policies would have catastrophic effects on patients, taxpayers and employers:

“As you take away the tools and the incentives for PBMs, they might not do as well at driving down prices in the future as they have in the past. So, again, there’ll be winners and losers from that. So, the winners would likely be the drug manufacturers, and the losers would likely be the employers, who get higher premiums.”

Maura Keefe underscored why employers value the flexibility and choice PBMs provide:

“Employers are having a more and more difficult time affording health care for their employees, affording prescription drug coverage, and that’s exactly why they partner with PBMs, to help negotiate lower drug prices from Pharma. If you think about a small business that has maybe 50 employees, the idea that they have the ability to have, you know, a team of lawyers, a big HR department, all the things that you need to be able to sort of have the power to negotiate lower drug prices, they don’t have that. And that’s why…the relationship with PBMs is so important.” 

“Recently, just this fall, we did a survey of 700 businesses across the country, 50 employees or more, to sort of understand their relationships with PBMs, and what we found is that nine out of 10 employers value the full range of PBM contract options they have, the ability to utilize rebates the way that makes sense for their companies, so we believe that the relationships between PBMs and businesses small and large, and unions, and retirees and others who utilize PBMs, helps to make drugs more affordable for their employees and for their members.”

Ike Brannon shared how recent policies targeting pharmacy benefit companies would undermine the one check on big drug companies, and how PBMs provide value by securing lower prices for pharmaceuticals:

“The most important thing [PBMs] do is they negotiate with pharmaceutical companies to get lower prices…How do you negotiate against monopolies? We have a lot of monopolies in the pharmaceutical industry…there is a way to negotiate lower prices against the monopolists, and that’s if you have an entity with a modicum of market power…One of the big things that a pharmacy benefit manager does is, if they represent numerous companies or health care plans, that they have a modicum of market power, and they can use the market power they have to go and negotiate against the monopolists – the drug company that has a patent for the drug – and they can use their market power to negotiate a lower price. So, the idea that the PBMs can be too big is kind of misconstruing the whole negotiation sphere – it should have some market power, that’s what makes it effective at doing this.”

As Congress continues to consider Big Pharma-driven proposals to undermine the work of pharmacy benefit companies to reduce prescription drug costs for patients and employers, PBMs continue to innovate to provide more choices for health plan sponsors to choose the best coverage for their needs. This recent expert panel underscores the disastrous consequences of advancing legislation that targets pharmacy benefit companies and should serve as a reminder to lawmakers to reject Big Pharma’s self-serving agenda.

Watch the full event HERE.

Learn more about why policies, such as “delinking,” would have costly implications on patients and families HERE.

See a recent op-ed from PCMA president and CEO JC Scott sharing how recent Congressional proposals would increase premiums HERE.

Find out more on what pharmacy benefit companies are doing to lower costs and support a more affordable health care future 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 275 million patients. Learn more at www.pcmanet.org