In case you missed it, PCMA President and CEO JC Scott testified before the U.S. House Education and the Workforce Committee Subcommittee on Health, Employment, Labor, and Pensions.
During Scott’s testimony, he highlighted the critical role of pharmacy benefit companies in the prescription drug supply chain, and clarified that employers are under no obligation to hire pharmacy benefit companies, but a vast majority choose to because of the flexibility and savings offered. He said:
“Pharmacy benefit companies both harness drug company competition, and also compete with each other for employers and health plan sponsors to hire them. Our companies are hired to administer prescription drug plans for more than 275 million Americans who have health coverage through public and private employers, labor unions, retiree plans, and federal programs.
“To be clear, no employer, union, or other plan sponsor is under any obligation to hire or use a pharmacy benefit company. But virtually all choose to do so because it brings them significant savings and enables them to better serve the patients in their plans. And the employers choose how best to use those savings, whether to lower premiums, lower costs at the pharmacy counter, or make benefits more robust. This is a key point. The pharmacy benefit company delivers the savings, and the employer decides how to use them.”
When asked about competition in the marketplace, Scott explained that if a plan sponsor is not satisfied with their pharmacy benefit company, the competitive marketplace of 73 full-service PBMs allows them to find a different pharmacy benefit company that works best for their needs:
“If a pharmacy benefit company is not providing the information that a client is requesting when they’re drawing up their RFP, when they’re designing their contract, then that client is going to move to another PBM. It is in the interest of the PBM to make sure they’re providing the data…
“If the companies are not providing what the client is asking for, the client is going to move elsewhere. That’s why we see new business models able to enter into the marketplace and differentiate and the kinds of contracts they’re willing to offer.”
Rep. Eric Burlison (R-MO-07) emphasized his first-hand experience saving money with pharmacy benefit companies during his time on the Board of the Missouri Consolidated Health Care Plan (MCHCP). He said:
“Now, the one thing that I have seen because I served on a board at Missouri Consolidated, where it was my responsibility as the board to buy the health insurance for over 100,000 lives. And you know what? When we did, we found that using a PBM dramatically drove down our cost for the entire group. I’ve heard testimony here that it’s a false choice, but I can tell you when you’re actually writing the checks, it’s not a false choice. It did save money. And so, it’s good to hear that there are choices.”
Business Group Letter on Protecting ERISA
Last week, a group of 22 business groups and individual employers from across the country sent a letter to Congress expressing support for preserving their contracting flexibility, including with respect to prescription drug benefits, and the protections provided by the Employee Retirement Income Security Act, ERISA.
Employers, including small and mid-sized businesses and labor unions, rely on pharmacy benefit companies because they offer a variety of coverage choices and flexibility that help plan sponsors provide affordable, quality prescription drug coverage.
As lawmakers debate drug pricing legislation, Congress must focus on the root causes of high drug prices – the anti-competitive practices utilized by drug companies and the increasingly high list prices drug companies routinely set. Congress should instead oppose misguided legislation that targets pharmacy benefit companies, which plan sponsors, including employers, and hundreds of millions of Americans rely on to make prescription drugs more affordable and accessible.
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Read PCMA’s statement ahead of the House Education and the Workforce Committee Subcommittee on Health, Employment, Labor, and Pensions hearing HERE.
Learn more about why employers hire pharmacy benefit companies to manage growing prescription drug costs HERE and HERE.
Pharmacy benefit companies offer choice and flexibility that allows employers to choose a benefit design that provides affordable, quality prescription drug coverage to their employees. Read more HERE.
See PCMA’s guide to understanding the role and value of pharmacy benefit companies 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
