U.S. Senator Rand Paul (R-KY) this week spoke about the value that pharmacy benefit managers (PBMs) create, lowering costs for patients and employers and playing a critical role pushing back against Big Pharma’s pricing power.
At an event with Competitive Enterprise Institute (CEI) economist Jeremy Nighohossian, the senator, a physician, made several important, clarifying comments about PBMs amid a Big Pharma misinformation campaign.
Senator Paul explained that PBMs leverage their negotiating power to secure rebates that lower drug costs for patients and employers, protecting patients from Big Pharma’s skyrocketing drug prices:
“Eliminating PBMs may well actually increase health care costs. That’s because employers and governments would have to negotiate every aspect of their drug formulary in-house, instead of relying on a PBM which specializes in negotiating with pharmaceutical companies… PBMs negotiating a formulary tier placement is one of the main impediments to pharma’s desire to set list prices even higher.”
Contrary to Big Pharma allegations, PBMs prefer generic drugs and biosimilars, which provide huge savings for patients. Dr. Nighohossian confirmed this, saying:
“And part of the story for why the prices of pharmaceuticals have been trending up more slowly than the general price level is because PBMs have been working to ensure that drug access is cost-effective and that we’re switching over to generics wherever possible.”
And, Sen. Paul made a point that too often goes overlooked – employers hire PBMs because they provide incredible value:
“Businesses voluntarily hire PBMs because they believe they lower drug prices. Why would anybody in any world hire a company to lower prices if really the opposite were happening? There would have to be proof that PBMs were working, or no one would voluntarily hire them.”
Jeremy Nighohossian is the author of “A Free Market Is the Best Medicine: Why Government Should Not Interfere with the Rapid Changes in the Pharmacy Industry.”
Watch the full webinar recording HERE.
