The Wall Street Editorial Board Demystifies PBMs In New Opinion Pieces
Claims that pharmacy benefit managers (PBMs) and the rebates they negotiate from drug companies are to blame for drug costs have made headlines, but there’s just one hitch: the facts say otherwise. Plenty of academic and government studies contradict these attacks, showing that rebates do not increase drug costs and PBMs act as a counterweight to Big Pharma’s anticompetitive and harmful tactics to keep drug prices high.
In a recent op-ed, The Wall Street Journal Editorial Board called out a fundamental flaw in this argument. If PBM-negotiated rebates are a problem, why does Congress require them for government plans? Why do government agencies, including the FTC which is currently investigating PBMs, ignore research from the Congressional Budget Office (CBO), which estimated that banning rebates in Medicare would substantially raise senior premiums and increase government spending by $170 billion over 10 years? The Editorial Board sets the record straight about rebates: “Yet even the FTC admits that net insulin prices after rebates have declined over time. This suggests competition fueled by the PBMs is working.”
Another Wall Street Journal Editorial Board op-ed raised further concerns regarding the FTC’s investigation into PBMs. Like others, the Journal contends that the FTC’s investigation ignores key data points. These data points, ultimately, undermine the agency’s sweeping, predetermined conclusions, echoing others well-established arguments contending the FTC is blatantly ignoring evidence that PBMs reduce the cost of prescription drugs. If this evidence isn’t enough, FTC Commissioner Melissa Holyoak criticized her agency’s findings report. She said it was “was plagued by process irregularities and concerns over the substance—or lack thereof.”
As it so happens, lawmakers are echoing similar sentiments; Senator Sanders called out Big Pharma for setting high GLP-1 list prices for U.S. patients at a recent Senate Health Education Labor and Pensions (HELP) Committee hearing. Sanders also reminded the Committee that PBMs are ready for lower prices from drugmakers, despite their claims, saying “I have received commitments in writing from the major PBMs that if Novo Nordisk lowered its list price, they would not limit access to Ozempic and Wegovy and would not take these drugs off of their formularies.”
It’s time for lawmakers to hold Big Pharma accountable for the high price of prescription drugs and protect the tools PBMs use to lower drug costs is crucial for employers and unions.
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