ICYMI: At Senate Finance Hearing, Brown Calls for PBM Reform to Lower Drug Prices

Download Production Quality Footage of Sen. Brown's Exchange HERE

WASHINGTON, D.C. - In Case You Missed It: yesterday, during a Senate Finance Committee hearing titled "Pharmacy Benefit Managers and the Prescription Drug Supply Chain: Impact on Patients and Taxpayers," U.S. Senator Sherrod Brown (D-OH) pressed for reform of Pharmacy Benefit Manager, or PBM, practices that lead to high drug prices for patients and high fees for Ohio pharmacies.

"It's an impenetrable system of fees most people have never heard of, that make it harder for local pharmacies to serve the Ohioans who count on them every day," said Brown. "In some cases, the fees are so exorbitant in some cases they force people's community pharmacy out of network, or to close all together."

Brown asked Jonathan Levitt, a PBM expert and attorney with experience holding these companies accountable, about the actions Congress should take to address the problematic fees.

"I think that there are some current laws that applies to Medicare Part D. Terms and conditions in Medicare Part D are supposed to be reasonable and relevant, but PBMs think that they can pay below costs to pharmacies and still get away with it. Their argument is 'look we have 68,000 pharmacies in our network, if it wasn't reasonable, they'd all drop out,' but they are dropping out. I would like CMS to clarify some current guidance. The guidance that says reimbursement rates must be reasonable, I'd like CMS to clarify to PBMs that that means the reimbursement rate actually must be reasonable." said Levitt.

Brown highlighted wins he secured for Ohioans in the Inflation Reduction Act of 2022that are lowering drug prices for Ohioans, and the need to build on that success.

"With the Inflation Reduction Act, we have stood up to Big Pharma and finally begun to take action to bring down the cost of prescription drugs. I've been working on this for my whole career - pushing for Medicare price negotiation, pushing to crack down on drug company price gauging. Their lobbyists rarely lose. They lost this time," said Brown "We can build on that success to lower prices further by reforming DIR fees reform."

Brown then asked Levitt to elaborate on the inconsistent quality measures that inform PBM fees.

"The DIR fees are supposed to be based on performance of pharmacies, but 50% of DIR fees plus are paid by specialty pharmacies and the PBMs do not know how to measure adherence for specialty drugs. I think they do it intentionally wrong. Sometimes they do it themselves instead of outsourcing adherence. If we had more time I could give you specific examples.But I think CMS has no idea how these PBMs are judging adherence. I think CMS should take a look. We sometimes ask PBMs in depositions, 'have you gone to CMS and asked whether you are doing adherence measurements correctly?' There is no communication between CMS and these big PBMs on DIR fees including on the net reimbursement rate after the DIR fee," said Levitt.

Finally, Brown raised the issue of supply chains and how they contribute to the high prices that Americans are facing at pharmacy counters.

"Every single manufacturer that wants to get their drug on a PBM's list of drugs that the PBM makes available to their big plan sponsors has to pay a rebate to get on formulary. So PBMs use that formulary as a tool to extract dollars from manufacturers. Sometimes if a manufacturer might resist, they might say we don't want to pay your rebate. PBM says we're not going to put you on formulary or maybe we will but we will make your copay tier three which means no one is going to want to buy your drug or we might use step edits or prior authorization so that physicians have a very tough time getting your drug onto the formulary. So, these rebate aggregators, no one knows how much money they actually take out of the system. To be clear the rebates that are collected by PBMs are not fully turned over to the plant sponsors or maybe even to the government, they are retained in the middle," said Levitt.

Brown has been a leader in efforts to lower prescription drug prices for all Ohioans. Last week, Brown asked U.S. Secretary of Health and Human Services (HHS) Xavier Becerra for his continued support of the health and wellbeing of Ohioans.

Because of Brown's work on this, culminating in the Inflation Reduction Act, for the first time, the Secretary of HHS is able to negotiate directly to lower the price of prescription drugs for Medicare beneficiaries to ensure older Americans get the best possible deal on high-cost medications. The legislation also includes a monthly $35 cap on out-of-pocket insulin costs for all Ohioans on Medicare who rely on insulin to stay healthy.

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