Senate panel asks CVS and other middlemen to testify about drug prices

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Senate Judiciary Committee Chairman Chuck Grassley (R-IA) talks with reporters as he heads for a meeting at the U.S. Capitol October 02, 2018 in Washington, DC. 

The Senate Finance Committee said Tuesday it invited five major pharmacy benefit managers to testify before Congress about high prescription drug costs in the U.S.

Chairman Chuck Grassley, R-Iowa., and Ron Wyden, D-Ore., the committee’s ranking member, asked Cigna, CVS, Humana, OptumRx and Prime Therapeutics to testify on Capitol Hill on April 3. Both senators have been critical of PBMs, sometimes referred to as middlemen, which negotiate drug benefits with manufacturers for insurance plans and employers.

“Middlemen in the health care industry owe patients and taxpayers an explanation of their role. There’s far too much bureaucracy and too little transparency getting in the way of affordable, quality health care,” Grassley and Wyden said in a joint statement Tuesday. “We’ve heard from pharmaceutical companies and it’s only fair that the committee has the opportunity to ask questions of other players in the health care supply chain.”

CNBC has reached out to each company for comment.

High drug costs have become a rare bipartisan issue with lawmakers on both sides of the aisle demanding something be done. President Donald Trump has made lowering prices one of the key issues of his administration. Democrats are jockeying to prove they can lead reform.

Spending on prescription drugs in the U.S. increased to $333.4 billion in 2017, according to the latest data from the Centers for Medicare and Medicaid Services.

The April hearing would mark the committee’s third on drug prices this year. Late last month, the committee heard from executives of AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer and Sanofi.

The pharma executives didn’t talk much about list prices. Instead, they blamed middlemen for pocketing discounts instead of passing them along to patients. They suggested changes to Medicare, including capping the amount seniors would pay for on their own at the pharmacy counter every year.

Grassley had hinted last month that the committee’s drug pricing probe wouldn’t end with pharmaceutical companies.

The nation’s four largest PBMs are now all integrated with health insurance firms, following the recent completion of CVS Health’s merger with Aetna and Cigna’s acquisition of Express Scripts. UnitedHealth Group owns the OptumRX PBM and Anthem will be launching its own unit IngenioRx.

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