At a House Energy and Commerce subcommittee hearing last week, the full pharmaceutical drug supply chain testified, including a group that professes to represent employer interests.

In one of the more fascinating exchanges, a member of the subcommittee sought to better understand how rebates become part of employer contracts with their pharmacy benefit manager (PBM). The question was put to the president of the ERISA Industry Committee (ERIC), playing the role of employer representative at the hearing, and his answer revealed a remarkable contradiction in the group’s lobbying.

ERIC has been a frequent critic of the rebates PBMs negotiate, but in this questioning, its president conceded that it is employers – those he seeks to speak for – who have insisted on something called “rebate guarantees.” The ERIC leader went so far as to say that these guarantees would soon go away after Congress recently passed PBM reform. Such a shift would mark a significant change in current PBM contracting. But perhaps more interesting was the double talk the questioning generated.

It was noted that rebate guarantees are something often included in a PBM contract. They are designed to ensure that the PBM will negotiate a minimum level of rebates from big drug companies. This makes sense because rebates, contrary to the misdirection from critics like ERIC, lead to lower drug costs. More rebates mean lower health care spending. This is a big part of why employers hire a PBM.

Importantly, PBMs regularly compete among each other for business. And when employers send out requests for proposals to win PBM contracts, they often prioritize a PBM that can deliver the most rebates. They frequently insist on these rebate guarantees to make sure drug spending is low.

Why then has ERIC railed against a cost savings tool when employers themselves highly value rebates in their PBM contracts? If employers want to maximize rebates – which go back to them to reduce costs – why is this employer organization talking them down? Indeed, employers report overwhelming satisfaction with their PBM contracts, including rebates.

Time will tell if ERIC was actually speaking for employers when he said such guarantees would go away, or if the hearing just affirmed that the organization is one of those Washington entities that exists more to perpetuate itself than to advance the interests of those it claims to represent.