PBMs Commit To Continued GLP-1 Coverage Options; Pharma Companies Won’t Commit To Setting Lower List Prices

The U.S. Senate Committee on Health, Education, Labor & Pensions (HELP) held a hearing, "Why Is Novo Nordisk Charging Americans with Diabetes and Obesity Outrageously High Prices for Ozempic and Wegovy?"

Despite PBMs pledging to continue facilitating coverage of these drugs, Big Pharma companies are still unwilling to commit to lowering the price of the drugs they create and instead, continue to try to redirect blame onto PBMs.

A couple of key considerations to consider coming out of the hearing:

• The Committee Confirmed that Drug Companies Set the Price: Big Pharma continues to blame PBMs for the high cost of drugs, but both Republican and Democratic Senators made it clear that drug manufacturers solely set these prices. Novo Nordisk, for example, has made nearly $50 billion from Ozempic, with much higher costs for Americans compared to patients in other countries. Additionally, Big Pharma's main argument that rebates somehow lead to high list price is false, with multiple reports, including from federal agencies themselves, confirming that rebates are uncorrelated to list price.
• PBM Coverage Options Continue, Regardless of Price Changes. The Senate Committee dispelled the myth from Big Pharma that PBMs prevent price reductions by excluding life-saving drugs from formularies. In reality, PBMs would welcome lower list prices and would continue to provide the same coverage options, and have committed to doing so. PBMs are hired to negotiate lower prices, the industry continues to push for price reductions and expand access and affordability to prescription drugs.
• FTC's Politically-Driven Agenda to Attack PBMs are Unprecedented. Despite senators on both sides of the aisle agreeing that drug manufacturers set prices, the Federal Trade Commission (FTC) continues to attack PBMs in a way that favors Big Pharma and buys into a pre-determined agenda to undermine the one real check against drug companies. Leading economists, dissenting FTC Commissioners,former policymakers and healthcare experts all agree that the FTC's targeting of PBMs is driven by politics, not sound policy. The recent interim report by the Commission lacks merit and should not be used to guide regulatory actions that would upend the market and ultimately lead to increased health care costs for consumers.
• Big Pharma-Backed "Delinking" Boosts Drug Company Profits. Big Pharma continues to push for "delinking" policies that would remove market-based incentives for PBMs to negotiate with drug companies to lower drug costs because it boosts their own profits. In fact, "delinking" would hand Big Pharma a $32 billion financial windfall and increase health care premiums by $39 billion for employers, patients, families and taxpayers.
• Lawmakers Must Back Bills that Lower Drug Costs Without Unintended Consequences. Instead of policies that would increase drug costs, Congress has the opportunity to lower drug prices and save patients billions - without the unintended consequences of targeting PBMs. Patent abuse by drug companies is costing $16 billion per year, and leading economists have pointed out that addressing this abuse can save billions without harming innovation incentives. The Congressional Budget Office (CBO) scored eliminating patent thickets as leading to $10 billion in savings.
• Big Pharma's Direct-to-Consumer (DTC) Advertising Increases Health Care Spending.
  Big Pharma's DTC advertising pushes patients to utilize high-priced brand name prescription drugs. Big Pharma acquires patient data and targets consumers with ads that promote blockbuster drugs over more affordable alternatives, advertising that is deducted as a business expense. In fact, advertising for Ozempic rose 21 percent from $405 million in 2022 to a whopping $491 million in 2023. Studies actually show that DTC ads increase utilization 10-15 percent - increased utilization results in increased premiums which increases health care costs for patients and families.

PCMA President and CEO JC Scott had an op-ed published in RealClearHealth highlighting the work PBMs are doing to help health plan sponsors, such as employers, navigate and expand coverage to GLP-1 drugs. In the piece, Scott discusses the various programs and actions pharmacy benefit companies are doing to counteract Big Pharma's egregious pricing tactics on these drugs to expand coverage and affordability.

See JC Scott's op-ed on how PBMs are helping to increase coverage, accessibility and affordability to GLP-1 drugs HERE.

Academic and economic experts reaffirmed the critical cost-saving role of rebates negotiated by PBMs, as a counterbalance to the pricing power of Big Pharma, at a House Judiciary Subcommittee hearing earlier this month. See what they had to say HERE.