Editor’s Note: The following is a testimony delivered by Erin Trish to the Senate Committee on Commerce, Science, & Transportation on February 16, 2023. More information about the hearing can be found here.
Key Points:
1. Structural reforms are needed to address the complex and influential role that intermediaries—especially pharmacy benefit managers (PBMs)—play in the pharmaceutical distribution system.
2. PBMs historically served a useful role to lower costs through price negotiation, greater use of generics, and expansion of mail-order services. But consumers have been left behind by recent trends in the PBM marketplace.
3. Rebates, spread pricing, clawbacks, vertical integration, and other practices allow PBMs to hide cost savings from patients and payers.
4. PBMs and other intermediaries capture an increasing share of drug expenditures—for example, more than half of spending on insulin—distorting drug pricing and reducing manufacturer incentives to innovate.
5. Greater transparency is needed in this marketplace, and PBMs should be required to share savings with consumers and plans.
Full testimony is available here.