House Judiciary Subcommittee Holds Hearing on the Role of PBMs

On Sept. 11, the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust held a hearing titled, “The Role of Pharmacy Benefit Managers,” featuring academic witnesses. The hearing focused on transparency, affordability, and access, as well as the relationship between PBMs and independent pharmacies. Witnesses highlighted the critical role of PBMs in the prescription drug marketplace to lower health care costs and how restricting PBMs would reward drug companies. Notably, when asked about proposals to ban spread pricing and rebates, the witnesses all agreed those proposals would be a mistake.

Responding to a question from Rep. Victoria Spartz (R-IN) on how Congress can ensure competition, choice, and access in the PBM market, Dr. Anthony LoSasso, Professor and Chair, Department of Economics, DePaul University, said “The goal is to create a system that allows for competition in the drug space to represent a meaningful counterweight to monopoly privileges that pharmaceutical companies have with patent protection.

Congress should be cautious about how it regulates the system. Well intentioned regulations can have unintended consequences.” Dr. LoSasso further said PBMs are widely misunderstood, as they force drug companies to compete on price, which is the last thing they want to do. He added, “So the effort to regulate, and I fear neuter, the impact of PBMs only plays into the hands of the pharmaceutical industry and strengthens their bargaining power.”

Dr. Mattingly, Vice Chair of Research, College of Pharmacy, University of Utah, disagreed with banning rebates or spread pricing, saying “you want the person negotiating the lower price to have some skin in the game too” and “there needs to be incentives along the supply chain.” Ultimately, Dr. Mattingly questioned “If you remove the PBM from the equation today, who or what steps in to fill that void?… who stands to gain from this new environment.