PBMs and insurers off the hook: Sen. Sanders’ selective hearing on drug costs

In recent months, multiple investigations by federal agencies, Congressional committees, states and media outlets have exposed ways pharmacy benefit managers (PBMs) and insurers profit off medicines at the expense of patients.

Just last week, the Federal Trade Commission (FTC) announced it’s suing the big PBMs for “artificially inflating” medicine prices and “boosting PBM profits at the expense of vulnerable patients.”

So why then would Senator Bernie Sanders (I-VT) hold a hearing on drug prices without including PBMs and insurers? Instead of holding these middlemen accountable, he’s giving them a free pass to continue driving up costs and denying coverage of medicines while they rake in record profits.

Here are five important facts that are missing from Sen. Sanders’ political narrative.

1. PBMs and insurers decide what medicines people can get and what they pay at the pharmacy, not the manufacturers. These middlemen get billions of dollars in rebates that lower what they pay for medicines, but often don’t use those savings to lower patients’ costs at the pharmacy. In fact, a recent study from the Bureau of Economic Analysis found that between 2016 and 2020, patient out-of-pocket costs grew faster than net prices faced by insurers.

2. Competition in the market is already dramatically lowering net prices for new, innovative diabetes and obesity medicines and will continue to do so. Rebates and discounts for prominent anti-obesity medicines can lower the net prices for these medicines by up to 79%. New estimates show there could be 16 new medicines to treat obesity competing in the market in the next five years, which will likely further drive down costs.

3. Medicines that treat and prevent obesity are dramatically improving the health of patients and can help deliver hundreds of billions in savings for the system and taxpayers.  The obesity and overweight epidemic results in an estimated  $1.72 trillion in medical costs and loss of productivity annually. If insurers covered obesity medicines, Medicare would save up to $245 billion over 10 years. Every time new groundbreaking medicines are approved critics claim they will bankrupt the health care system. We heard similar attacks  when breakthrough cholesterol and Hepatitis C treatments came to market. But those claims never pan out. Competition lowers costs and innovative medicines drive savings across the system.

4. The cost to copy a medicine doesn’t reflect the costs of researching and developing a new one and doesn’t cover failure costs. Bringing a new medicine to market takes $2.6 billion and 10-15 years and just 12% of drugs entering clinical trials are successful in reaching FDA approval. Removing the incentive for innovation would result in fewer new medicines for patients.  

5. Deceptive price comparisons could damage innovation and patient access in the U.S. The U.S. leads the world in biopharmaceutical innovation which allows Americans better and quicker access to life-changing cures and treatments, in some cases years ahead of other countries. Even with our innovative advancements, the U.S. spends about the same share of health care spending, 14%, as other countries. 

Remember — repeating a false claim doesn’t make it true. If Sen. Sanders and others want to lower out-of-pocket costs for patients, they should take on PBMs and insurers for denying patients coverage to life-changing medicines and driving up what they pay at the pharmacy.