The House Energy and Commerce Committee wants the Trump administration to probe how mergers of drug middlemen called pharmacy benefit managers has affected drug prices for consumers.
The committee sent a letter to the Federal Trade Commission on Friday calling for a retrospective review of mergers of pharmacy benefit managers, which oversee drug plans for employer and union-sponsored health plans. Lawmakers are worried about the large amount of consolidation of PBMs.
“In 2016, the three largest PBMs — CVS Health Corporation/CVS Caremark, Express Scripts Holding Company, and UnitedHealthcare/Optum Rx — accounted for about 70 percent of market revenues, with the two largest PBMs accounting for nearly 52 percent of market revenues,” the letter said. “All three of these PBMs have participated in mergers.
PBMs negotiate with drugmakers to get rebates on their products in exchange for putting them on a health plan’s formulary.
However, Trump administration officials charge that PBMs have played a role in keeping drug prices high. Since PBMs get a cut of the rebate, there is a perverse incentive for them to want higher list prices, which result in bigger rebates.
President Trump proclaimed that PBMs were getting “very rich” off high drug prices in a speech in May outlining his administration’s blueprint to combat prices.
“Pharmacy benefit managers are getting paid by both sides of a transaction: the insurance companies, who pay a fee as their customers, and the drug companies they’re supposed to be negotiating against, who give them a cut of the rebates they receive, along with other administrative fees that are based on list price,” Health and Human Services Secretary Alex Azar said back in May.
The committee wants to look into whether past enforcement of PBM mergers has been effective in addition to whether the mergers have helped PBMs save plan sponsors money.
