Pharmacy benefit managers in the hot seat

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Mar 27, 2023 View in browser   By Daniel Payne and Krista Mahr Presented by With Megan R. Wilson and Ben Leonard Pharmacy benefit managers will come under scrutiny this week by both chambers of Congress. | Scott Olson/Getty Images PBMS FACE THE MUSIC — Pharmacy benefit managers are bracing for a hard week on the Hill. The Senate Finance Committee will hold a hearing Thursday on the impact PBMs — the pharmaceutical middlemen that negotiate drug discounts with drugmakers and design prescription drug benefits for health plans — have on the health system. The House Energy and Commerce Health Subcommittee is also expected to look into how much value PBMs add as part of a broader discussion about fairness in the health care market, according to a memo shared with Megan. The hearings could suggest what’s to come for what lawmakers, lobbyists and the administration consider a key issue for the rest of the year. What PBMs are saying: They argue they’re misunderstood. J.C. Scott, who leads the industry group for PBMs, said earlier this month that his members “have a proven track record of reducing prescription drug costs.” His group, Pharmaceutical Care Management Association, is running an ad campaign touting the benefits PBMs offer and slamming a bipartisan bill to rein them in, which was recently advanced by the Senate Commerce Committee. PBMs say they’re already subject to transparency rules and instead support a pack of patent reform bills that would crack down on ways drugmakers prevent cheaper generics and biosimilars from coming to market. What lawmakers will likely point out: The three largest PBMs — CVS Caremark, Express Scripts and OptumRx — control roughly 80 percent of the prescription drug market. They also each have affiliated pharmacies and own, or are owned by, insurance companies. The administration angle: During hearings last week featuring HHS Secretary Xavier Becerra, a bipartisan set of lawmakers homed in on PBMs, Ben reports from the Hill. “There is a growing concern that the middlemen … are skimming off a good deal of the money,” Becerra said. “We’re going to try to move to make sure that if there’s a middleman … that it’s done efficiently.” It’s not just HHS: The Federal Trade Commission is studying how the industry affects consumer drug prices. And there’s more: Several Senate HELP Committee members have suggested they want to turn a critical eye toward PBMs, and staffers tell your host to expect more action in the future. Plus, the House Oversight and Accountability Committee has launched an investigation into the industry’s effect on patients. WELCOME TO MONDAY PULSE, where we’re intrigued by the new interior design trend: mushrooms. Are you the proud owner of a mushroom-shaped lamp? Or maybe you have a tip about this week’s PBM hearing on the Hill. Either way, drop us a line at dpayne@politico.com and kmahr@politico.com. TODAY ON OUR PULSE CHECK PODCAST, host Carmen Paun talks with Erin Schumaker, who discusses a U.S. Department of Defense–funded $3 million collaboration between UMass Lowell and Soar Technology to find the best human decision-making attributes artificial intelligence can imitate and the value of training AI to handle situations in which there are no clear right or wrong answers. Listen to today’s Pulse Check podcast   A message from PhRMA: What’s a pharmacy benefit manager (PBM)? They decide if medicines get covered and what people pay for them, regardless of what your doctor prescribes. These middlemen are putting their profits before your medicines. And getting between you and your doctor. You need to see what’s going on.   In Congress Lawmakers are looking to enlist big tech companies to help battle the country's opioid epidemic. | Scott Olson/Getty Images TAKING ON OPIOIDS ONLINE — Lawmakers and the administration want to involve big tech companies in the fight against opioid abuse. Sens. Roger Marshall (R-Kan.), Jeanne Shaheen (D-N.H.) and Chuck Grassley (R-Iowa) hosted Rahul Gupta, director of the White House’s Office of National Drug Control Policy, for a discussion about combating the opioid epidemic. They want social media companies to be more proactive in stopping drug dealers from using their platforms, according to a statement about the Friday meeting. They also discussed potential legislative and executive action, including the Cooper Davis Act, a bill introduced last Congress that would require internet service providers to report knowledge of drug-related offenses to the Drug Enforcement Administration. ANOTHER WAY TO COUNT — The House Energy and Commerce Committee advanced legislation that would bar federal agencies from using “quality-adjusted life years” when determining the cost-effectiveness of treatments, Ben reports. Republican leaders hoped for a bipartisan vote to ban the widely used metric, saying it undervalues the benefits that therapies provide to people who have disabilities or are elderly. The Friday party-line vote, 27-20, suggests Republicans will have trouble getting the bill enacted as it currently stands, even if the House passes it. Energy and Commerce ranking member Frank Pallone (D-N.J.) has expressed concerns that the bill, if enacted, would interfere with Medicare’s future drug-price negotiations by prohibiting other cost-effectiveness measures.   JOIN POLITICO ON 4/5 FOR THE 2023 RECAST POWER LIST: America’s demographics and power dynamics are changing — and POLITICO is recasting how it covers the intersection of race, identity, politics and policy. Join us for a conversation on the themes of the 2023 Recast Power List that will examine America’s decision-making tables, who gets to sit at them, and the challenges that still need to be addressed. REGISTER HERE.     At the Agencies WHAT THEY KNEW — Months before the latest infant formula recall, the FDA knew about positive tests for bacteria in some products, POLITICO’s Helena Bottemiller Evich reports. In late February, formula giant Reckitt recalled 145,000 cans of a plant-based formula because of the “possibility of cross-contamination with Cronobacter sakazakii” — the deadly pathogen that sparked the infant formula crisis last year. But months before — in November — FDA inspectors had become aware of the positive tests that ultimately sparked the recall. The revelation that it took months to announce the recall comes more than a year after a massive infant formula recall from Abbott Nutrition, renewing questions about the FDA’s oversight of formula and whether enough has changed since then to prevent another recall.   A message from PhRMA:   Global Health TB’S RETURN — Europe saw the first rise in tuberculosis deaths in nearly two decades, POLITICO’s Sarah-Taïssir Bencharif reports. The increase in the disease’s toll in 2021, reported by the World Health Organization last week, is largely attributed to the pandemic disrupting diagnostics and treatments. In the WHO European Region, 27,300 people died from TB in 2021 compared with 27,000 deaths in 2020, according to the report. But WHO officials caution the pandemic also changed the way TB data was collected, which also could affect the year-over-year numbers. IN THE STATES FLORIDA’S WAITING GAME — Florida regulators are going after abortion providers — but not only for violating its 15-week ban, POLITICO’s Arek Sarkissian reports. Over the last year, the state has punished more than a dozen providers for violating a nearly decade-old law that requires pregnant patients to wait 24 hours before getting an abortion. The 2015 law was in limbo in the courts until a judge upheld it last April. Florida’s abortion regulator, the Agency for Health Care Administration, almost immediately began issuing fines even as abortion rights advocates argued providers weren’t given enough time to prepare.   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.     Names in the News Caroline Dvorsky has been promoted to deputy White House liaison at the Department of Health and Human Services, POLITICO’s Daniel Lippman reports. She most recently was senior adviser. Aaron Bernstein will become the new director of the National Center for Environmental Health and the Agency for Toxic Substances and Disease Registry at the CDC. He previously led the Center for Climate, Health, and the Global Environment at Harvard T.H. Chan School of Public Health. Ellen Locke is now the political action committee manager for UnitedHealth Group. She most recently was director for U.S. government relations at MetLife and is a Nationwide alum. What We're Reading ProPublica reports on Cigna’s savings from having its doctors reject claims without reading them. The New York Times reports on patients who say their Adderall is no longer working.   A message from PhRMA: Insurers and their PBMs don’t want you to see that you could be paying more than they are for your medicines. Rebates and discounts can significantly lower what insurers and PBMs pay for medicines. These savings can reduce the cost of some brand medicines by 50% or more. But insurers and PBMs aren’t required to share those savings with you at the pharmacy counter. They don’t want you to see that they use deductibles, coinsurance and other tactics to shift more costs on to you. Or that the three largest PBMs control 80% of the prescription drug market. Or that last year they blocked access to more than 1,150 medicines, including medicines that could have lowered costs for you at the pharmacy.  PBMs and insurance practices are shrouded in secrecy,  they need to be held accountable.       Follow us on Twitter Dan Goldberg @dancgoldberg Katherine Ellen Foley @katherineefoley Lauren Gardner @Gardner_LM Ben Leonard @_BenLeonard_ David Lim @davidalim Krista Mahr @kristamahr Megan Messerly @meganmesserly Alice Miranda Ollstein @aliceollstein Carmen Paun @carmenpaun Daniel Payne @_daniel_payne Ruth Reader @RuthReader Erin Schumaker @erinlschumaker Megan R. Wilson @misswilson   Follow us

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