Lawmakers Look To Lower Prescription Drug Prices By Targeting Pharmacy Benefit Managers

Lowering the cost of prescription drugs is a goal shared by both Republicans and Democrats in Washington.

They may not fully agree on how to do it, but they do seem to agree that one part of the solution involves keeping the so-called ‘middlemen’— pharmacy benefit managers, or PBMs — from artificially boosting prices to boost their own profits.

Bipartisan legislation to stop what’s viewed as unfair and deceptive PBM business practices has been introduced, oversight hearings in both the House and Senate are planned, and today a hearing on the administration’s Health and Human Services FY 2024 budget proposal provided an opportunity for Oklahoma Senator James Lankford to dig into the issue.

"You talk a lot about drug policy,” Sen. Lankford began his question for HHS Secretary Xavier Becerra, “but there’s nothing about PBM’s in some of the proposals in your budget piece.”

Senator Lankford wanted to know why the HHS budget makes no specific mention of PBM's, companies that manage prescription drug benefits on behalf of insurance companies, negotiating drug prices with the drug manufacturers. Just this morning, he said, a concerned constituent came to his office asking what Washington is doing about PBM's

"And I told her, ‘I’m about to walk into a hearing with Xavier Becerra and ask that exact question you just asked me,’” Lankford recalled in an interview Wednesday afternoon.

Moments later, Lankford did: “What’s the plan at this point on dealing with drug pricing and the PBM’s?” he asked. Becerra assured Lankford, while it may not be spelled out in the budget, his agency is very mindful of the impact of these third-party administrators.

"Because we know, more and more,” Becerra stated, “there is a growing concern that the middlemen in the process of getting drugs from a manufacturer to patients are skimming off a good deal of the money that’s being generated."

Lankford welcomed Becerra's pledge, saying that it's critical there be greater transparency around drug pricing.

"Because this middle man behind the scenes,” Lankford said, “is really controlling access to drugs, the price of drugs, the over-price of drugs, and quite frankly, also keeping generics off the market."

This same Senate Finance Committee is scheduled to hold a hearing specifically on pharmacy benefit managers next week. Lankford says Chairman Ron Wyden (D-OR) hasn’t yet said who the witnesses will be.