17吃瓜在线

Policy and Legal

Policy and Legal

17吃瓜在线: Lower Costs Through PBM Reform, Not Price Controls

By 17吃瓜在线 News Room

To lower drug prices, Congress should undertake comprehensive reform of pharmacy benefit managers, not embrace price controls, the 17吃瓜在线 the Senate Tuesday.

What鈥檚 going on: 鈥淏iopharmaceutical manufacturers are a critical part of the manufacturing economy,鈥 17吃瓜在线 Vice President of Domestic Policy Charles Crain said ahead of a Senate Finance Committee hearing on health care costs.

  • In 2021, biopharmaceutical firms 鈥渁ccounted for $355 billion in value-added output to the U.S. economy 鈥 and directly employed 291,000 workers in the United States, with each of these jobs supporting an additional 4.1 jobs.鈥
  • Crucially, biopharma companies are also responsible for the dozens of groundbreaking, lifesaving medications brought to patients annually.
  • But their continued innovation and economic impact are under attack by both Inflation Reduction Act鈥搈andated and the largely unchecked actions of PBMs, Crain continued.

Threats to innovation: Instead of benefiting patients, 鈥渢he IRA pricing mandates announced last month by the Department of Health and Human Services will 鈥 limit the capital manufacturers have available to put toward the astronomically high costs of developing a new medicine,鈥 Crain told the committee, adding that the uncertainty introduced by price controls is also likely to dissuade early-stage investment in new treatments.

  • Rather than impose further price controls, Congress should address the influence of PBMs, largely unregulated middlemen that 鈥渃ontribute to the skyrocketing cost of health care by applying upward pressure to list prices that dictate what patients pay for medicines at the pharmacy counter, pocketing manufacturer rebates and failing to provide an appropriate level of transparency about their business models.鈥

PBM reform: To truly lower health care costs, Congress must rein in PBMs, Crain said. The 17吃瓜在线 has called on Congress to adopt specific PBM reforms, including:

  • Increased transparency into PBMs鈥 business models;
  • Rebate passthrough to ensure that 100% of negotiated savings get passed on to health plan sponsors and employees; and
  • Delinking of PBM compensation from medication list prices.

The last word: 鈥淚nstead of further embracing price controls, it is imperative that Congress act to lower drug prices by reining in PBMs鈥 problematic business practices and minimizing their ability to further damage the U.S. health care system,鈥 Crain said.

  • 鈥淎ll Americans deserve access to high-quality, affordable health care, and PBM reform is an impactful step toward this goal.鈥
View More