Summer Lee Blasts Pharmacy Benefit Managers, Drug Companies Profiteering off Medication; Witnesses Agree

(Washington DC) – Below is Congresswoman Summer Lee’s questioning during today’s Committee on Oversight and Accountability hearing entitled “The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part I: Self-Interest or Health Care?”

During her questioning, Rep. Lee said, “Americans shouldn’t have to choose between feeding their families and their diabetes medication. We shouldn’t have to go into bankruptcy to treat our loved ones’ cancer.  We shouldn’t have to raise thousands of dollars on a GoFundMe site when we’re injured in an accident. This is uniquely an American problem. Our healthcare system is broken and rotted to its core on every level. PBMs are just a part of a greater problem, and we cannot allow them to be a scapegoat to avoid addressing true issues. Americans deserve universal health care. We deserve Medicare for all.”

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Full Transcript: 

Rep. Summer Lee (PA-12): 

I’m excited to be able to talk about something in this committee that is actually meaningful to American people, lowering prescription drug costs and increasing access to affordable care. 

I’m happy we all agree that drug prices are out of control. Yet, we seem to be the only country suffering from this problem. 

This committee’s three year investigation into drug companies discovered many ways that pharmaceutical companies prioritize profits over people, including flagrant anti-competitive behavior to maintain their monopoly pricing. Mr. Isasi, how specifically has anti-competitive behavior led to higher drug prices? 

Frederick Isasi JD, MPH, Executive Director, Families USA: 

It’s driven out competition, it’s driven, it’s created consolidated power amongst individual drug makers and they raise their prices without, you know, unchecked.

Rep. Summer Lee (PA-12): 

Thank you. This committee also found that drug companies were specifically targeting the U.S. for high drug prices because Medicare can’t negotiate the price of drugs directly with those companies. Mr. Isasi, can you explain how the U.S. is different from so many other countries in this way and how that’s led to higher drug prices? 

Frederick Isasi JD, MPH, Executive Director, Families USA: 

That’s exactly right. We are talking about an industry that is over a trillion dollar industry a year. Half of their profits are coming just from the U.S. and Canada–out of that trillion dollar industry— so, they are fleecing Americans. 

Until we passed the inflation Reduction Act, we had no ability to get in there and negotiate a fair price. It’s really important to point out Part D, which is the benefit that allows seniors to get prescription drugs–so important–was designed so there was no real negotiation. It was designed so there were small regional Prescription Drug Plans who couldn’t really negotiate and had no negotiating power. So it was by design a terrible deal for the American public.

Rep. Summer Lee (PA-12): 

People across the country have been struggling for years to afford health care, though important drug prices are just one piece of that puzzle. 

How do drug prices inflate overall health care costs that families pay? What does this mean on a practical level for someone who relies on high cost medication?

Frederick Isasi JD, MPH, Executive Director, Families USA: 

A quarter of all the premium increases you’re experiencing are because drug prices are going up so fast. And what’s really important to say is for lots of lots of people out there aren’t taking prescription drugs, right? So they don’t even realize that every year their premiums are going up. Because prescription drug companies are fleecing them. It goes into the risk pool of your employer and the risk pool of your insurance program etc.

Rep. Summer Lee (PA-12): 

So in keeping with that point, more than half of overall spending goes to so-called specialty drugs, even though they make up about 2% of the medicines dispensed. This designation is defined differently across market by PBMs. 

Mr. Baker, can you explain how PBMs arbitrary decision making on whether to label a drug specialty is affecting patients?

Greg Baker, CEO of AffirmedRx:

Yes, absolutely. That’s an incredible point. In the pharmacy industry, we can pretty well come to an agreement on what is considered a brand and generic drug. It all stops there. So this world of specialty has really started growing since about 2014-2015. It is exponentially growing to your point being 50% or more of all spend today, and PBMs can call any drug they want a “specialty”. Every PBM will have a different specialty list. Every PBM could have a different specialty list for different types of fulfillment channels. So, the specialty list that we use for independent pharmacies could be different from the one I use for my own PBM pharmacy if I wanted to use it. So this lack of transparency and ability to have oversight on what is considered especially limited distribution or other does drive a lot of profiteering. 

Rep. Summer Lee (PA-12):  

Thank you. In the end, this is actually a somewhat simple conversation. Drug companies set drug prices. If the drug companies set lower prices for medications, American families would pay lower prices. That said, it’s important to understand the context in which those drug companies operate and who they operate with. 

Americans shouldn’t have to choose between feeding their families and their diabetes medication. We shouldn’t have to go into bankruptcy to treat our loved ones’ cancer.  We shouldn’t have to raise thousands of dollars on a GoFundMe site when we’re injured in an accident. This is uniquely an American problem. Our healthcare system is broken and rotted to its core on every level. PBMs are just a part of a greater problem, and we cannot allow them to be a scapegoat to avoid addressing true issues. Americans deserve universal health care. We deserve Medicare for all. And with that, I will yield back. Thank you.