About PhRMA
The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are laser focused on developing innovative medicines that transform lives and create a healthier world. Together, we are fighting for solutions to ensure patients can access and afford medicines that prevent, treat and cure disease. Over the last decade, PhRMA member companies have invested more than $850 billion in the search for new treatments and cures, and they support nearly five million jobs in the United States.
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WASHINGTON, D.C. (Jan. 22, 2026) — Following hearings held today by the U.S. House Energy and Commerce Committee and the House Ways and Means Committee examining the role of health insurers in rising health care costs, Pharmaceutical Research and Manufacturers of America (PhRMA) Deputy Vice President of Media Relations Chanse Jones issued the following statement:
“Today’s hearings showed exactly why Americans are fed up with rising insurance costs. For more than four hours, insurance executives dodged responsibility for denied care, soaring premiums and deductibles. These same companies and other entities they might own, take roughly half of every dollar spent on brand medicines, and the insurers’ own data show profits and overhead take a bigger bite out of premiums than medicines that patients need. Yet they came to the Hill offering no real transparency, accountability, or solutions. While insurers stick to the same tired playbook, our industry is working with lawmakers to deliver meaningful changes that make medicines more affordable for American patients and taxpayers.”
Data clearly shows the largest part of the health care system — hospital care — is also the place where costs are the most out of control. The evidence:
- This month, CMS actuaries released their accounting of the $5.3 trillion in U.S. health care spending in 2024. Hospitals accounted for $1.6 trillion of that total, with hospital spending up by nearly 9 percent. That’s nearly one out of every three dollars spent on health care. Physicians were responsible for another $1.1 trillion.
- Hospital prices experienced the highest rate of increase since 2007 (up 3.4%). In contrast, CMS estimated that retail pharmaceutical prices only went up 1.4%. Net prices on pharmaceuticals have been falling for years. In 2026, even average list prices -- when adjusted for volume -- have fallen.
- Data continues to stack up on hospitals: The federal 340B hospital markup program grew more than 20% in 2024 to $81.4 billion, according to HRSA, making it the nation’s second-largest drug program and on pace to become the largest by 2027. Data shows 340B costs taxpayers billions each year and is rapidly growing due to large, tax-exempt hospitals exploiting the program for profit with little evidence patients are benefiting.
- Hospitals drive higher per capita spending in the United States compared to Europe. A KFF analysis last year concluded, “The difference in spending on inpatient and outpatient care is $4,531 per person, accounting for almost 80% of the difference in spending between the U.S. and comparable countries.”
- According to the insurance industry’s own data, brand medicines make up less than 10 cents of every premium dollar while hospitals take nearly half of every premium dollar.
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