US drug industry middlemen defend business model amid accusations of
raising patient costs
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[July 24, 2024]
By Amina Niasse and Bhanvi Satija
(Reuters) -U.S. pharmaceutical industry middlemen defended their role in
the healthcare system during a Congressional hearing on Tuesday after
committee members accused them of pushing patients toward expensive
treatments even when lower-cost options are available.
A House Committee on Oversight and Accountability report released
earlier on Tuesday said it found evidence that these pharmacy benefit
managers force drugmakers to pay rebates for placing their branded drugs
in a favorable position on their lists of medications covered by various
insurance plans.
In testimony before the committee, executives from the top three U.S.
drug benefit managers - UnitedHealth's OptumRx, Cigna's ExpressScripts
and CVS Health's Caremark - said their business models save health plan
members money, including plans run by labor unions.
They blamed "patent abuses" by drug manufacturers that delay launches of
cheaper generic and biosimilar medicines for the heightened costs to
consumers. The launch price of new drugs was also an issue, they said.
Pharmaceutical executives, in turn, have repeatedly said the PBMs are to
blame for high prescription drug costs.
CVS Caremark President David Joyner, however, told the committee that
last year a new to market drug carried a median annual price of
$300,000.
"Humira, Ozempic and Stelara alone costs more than every generic drug
combined," he said of AbbVie's top-selling arthritis treatment, Novo
Nordisk's diabetes drug widely used off label for weight loss, Johnson
and Johnson's blockbuster Crohn's disease treatment.
Joyner described the price of GLP-1 drugs used for weight loss as
"overwhelming," adding costs would surpass 1.2 trillion dollars annually
if all obese people received one.
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Eli Lilly CEO David Ricks, Sanofi CEO Paul Hudson, Novo Nordisk CEO
Lars Fruergaard Jorgensen, CVS Executive Vice President and
President of Pharmacy Services David Joyner, Express Scripts
President Adam Kautzner and OptumRX CEO Heather Cianfrocco testify
before a Senate Health, Education, Labor and Pensions Committee
hearing entitled "The Need to Make Insulin Affordable for All
Americans" on the Hill in Washington, U.S., May 10, 2023.
REUTERS/Leah Millis/File Photo
![](http://archives.lincolndailynews.com/2024/Jul/24/images/ads/current/fcs_funeral_lda_border_04029022.png) Novo's Ozempic and Wegovy and Eli
Lilly's Mounjaro drove more than two-thirds of the increased costs
for Caremark customers in 2023, according to Joyner.
Committee Chair James Comer, a Republican, accused PBMs of shifting
responsibility for drug pricing onto manufacturers.
"That's not what we hear from doctors all across America. That's not
what we hear from pharmacists all across America," Comer said.
Pharmacy benefit managers handle prescription drug benefits for
health insurance companies, large employers, and Medicare
prescription drug plans.
Those businesses at CVS, UnitedHealth and Cigna control 80% of
prescription drugs dispensed in the U.S., according to
Representative Jamie Raskin, a Democrat.
The three largest intermediaries have used their position "to enact
anti-competitive policies" and protect their own profits, the
committee said in its report.
It also said the healthcare companies share patient data among
business units to steer patients toward pharmacies owned by them.
The companies have also begun moving some operations abroad to avoid
transparency and proposed reforms, the report said.
(Reporting by Amina Niasse in New York City and Bhanvi Satija in
Bengaluru; Editing by Bill Berkrot)
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