Congress told: pharmacy distribution reform severely needed

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The president and CEO of the Senior Care Pharmacy Coalition warned the House Energy and Commerce Health Subcommittee on Wednesday that pharmacy benefits managers are bad for business, for both consumers and the federal government.

"Pharmacy benefit managers harm competition and are today exacting billions of dollars from the drug supply chain without providing any value for consumers or the federal government,” Alan G. Rosenbloom told the panel in submitted comments.

His statement came as the subcommittee held a public hearing on the drug supply chain, calling witnesses to discuss manufacturing, wholesale and distribution to determine how those factors influence pricing.

Rosenbloom did not testify, but his on-the-record statement outlined several legislative reforms directed at PBMs that he said are necessary to protect consumers, elderly patients and long-term care pharmacies. He noted just three PBMs process more than 90% of all prescriptions for LTC pharmacies.

“Their consolidation and vertical integration exacerbate the harm to consumers, government payment programs, pharmacies and free market competition," Rosenbloom said.

He countered claims made by PBM representatives that they play a key role in negotiating drug discounts on behalf of purchasers. He said that may have been true 10 to 20 years ago, but today they are “taking profits for themselves at a cost to patients, pharmacies and the federal government."

He called on Congress to force PBMs to pass along all rebates, require greater transparency of their pricing and practices, hold a follow-up hearing looking at how PBMs “exploit” undue market power and refer related issues to the House Judiciary Committee for investigation of the effects on Medicare.