PCMA Statement on Reducing Prescription Drug Prices

(Washington, D.C.) — Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt released the following statement on the Senate Finance Committee hearing: “Prescription Drug Affordability and Innovation: Addressing Challenges in Today’s Market:

“We share the Administration’s goal of reducing drug prices. The easiest way to lower costs would be for drug companies to lower their prices.

Pharmacy benefit managers (PBMs) typically reduce prescription drug costs by 30 percent by using their scale and expertise to negotiate discounts from competing drug companies and pharmacies and by encouraging consumers to use the most cost-effective drugs.

Manufacturers have chosen to negotiate price concessions with PBMs using rebates, which are paid months after a drug has been dispensed and are used by payers to reduce premiums and out-of-pocket costs for patients. Simply getting rid of rebates and other price concessions would leave patients and payers, including Medicaid and Medicare, at the mercy of drug manufacturer pricing strategies.

A recent Medicare Part D report by the Health and Human Services Office of Inspector General debunks the myth that drugmakers somehow have been compelled to raise prices because of the discounts and rebates health plans and PBMs demand to reduce overall costs.

In addition, the Senate Finance Committee Minority staff report: “A Tangled Web: An Examination of the Drug Supply and Payment Chains,” rightly points out that drugmakers alone set prices and that competition is key to reducing costs.

Unfortunately, today’s inside-the-beltway drug pricing debate is littered with ideas that real-world payers and economists have rejected because they’d actually raise costs.

Among these are so-called transparency policies forcing payers to publicize their negotiating and discounting strategies with competing drugmakers. The Federal Trade Commission has repeatedly said this would give manufacturers a huge advantage and reduce their incentives to offer discounts and rebates.

In any case, payers — not PBMs — already call the shots on transparency. Each payer and its benefits consultant determines exactly what kinds of transparency it wants long before choosing a PBM to help execute it.

We look forward to working with the Administration and Congress to increase competition among prescription drugs and avoid policies that decrease quality and increase costs for consumers.”