Q: What are Pharmacy Benefit Managers (PBMs) and why are you working to reform how they operate?
A: So far this year, I’ve held 61 county meetings across the state. I’m hearing from Iowans how it’s harder than ever to make ends meet. Paying for gas and groceries is taking a bigger bite out of their wallets. And that makes it even harder to pay for the soaring prices of prescription drugs. Sticker shock at the pharmacy counter is more painful than ever. For several years, I’ve led the effort in Congress to push for bipartisan consensus on reforms that would drive down the costs to consumers without harming medical breakthroughs that generations of Americans depend on to lead healthier, longer, more productive lives. When I chaired the Senate Finance Committee, I conducted a two-year investigation into insulin drug prices and called Big Pharma and insurance executives to testify on Capitol Hill, as well as the Pharmacy Benefit Managers (PBMs) who serve as the middlemen in the complex prescription drug supply chain. Through my investigative work, examination of policy and feedback from Iowans, it’s clear the drug pricing structure needs transparency to root out unfair and deceptive practices that enable prescription drug prices to skyrocket. Sunlight will help rein in abusive pricing schemes and bring accountability to the drug prices paid by taxpayers, patients and employers. I worked with Sen. Pat Leahy of Vermont to stop anticompetitive shenanigans used by Big Pharma that delay more affordable generic drugs from reaching the pharmacy store shelves. Our CREATES Act was signed into law in 2019 and will save consumers and taxpayers billions of dollars in the coming decade. My bipartisan Right Rebate Act was also signed into law during the Trump administration and closes a loophole Big Pharma exploited to misclassify drugs in the Medicaid Drug Rebate Program and fleece the taxpayer for billions every year.
Most recently, I introduced a bipartisan bill with Sen. Maria Cantwell of Washington that would require the Federal Trade Commission (FTC) to go after PBM abusive practices and examine the pricing structures, such as spread pricing. This practice is when the PBM pays the pharmacy one price but charges the patient’s health plan a higher rate to pocket the difference. Our Pharmacy Benefit Manager Transparency Act would help eliminate deceptive pricing schemes; ban PBMs from clawing back payments to pharmacies; and, require PBMs to report to the FTC how much money they make through spread pricing and pharmacy fees. The nonpartisan budget scorekeepers at the Congressional Budget Office estimate ending spread pricing in Medicaid would save taxpayers about $900 million over the next decade.
Q: Should the federal government negotiate drug prices for the Medicare program?
A: First, let’s be crystal clear what “negotiate” means. It means the government would dictate drug prices, there would be no negotiation. That puts government bureaucrats between Americans and what’s in their medicine cabinets. Setting the prices pharmaceutical companies can recover for research and development would dry up innovation, cede our American ingenuity and leadership to China, deny consumer choice and ration access to lifesaving medicines, therapeutics and cures. When I chaired the Senate Finance Committee in 2003, I wrote the most comprehensive modernization to Medicare since it was enacted more than five decades ago. My bill created a voluntary Part D prescription drug benefit. Today, 49 million seniors have prescription drug coverage. At that time, I stopped the progressive push to put the federal government in charge of a one-size-fits-all drug pricing regime. Instead, my bill fostered competition to keep costs low, expand patient choice and encourage innovation for better cures to Americans. Analyses by the Congressional Budget Office, Council of Economic Advisers, and the University of Chicago all estimate that fewer drugs and treatment would be invented over the next generation if the federal government dictates the price for medicines. Countries with socialized medicine may be willing to accept fewer cures, but I believe we should encourage more innovation and cures while lowering costs for patients and taxpayers. And yet, the Biden administration and others want the federal government to dictate drug prices. The Build Back Better agenda included it among its Big Government planks. Americans can breathe a sigh of relief these socialist price controls were stopped in the U.S. Senate thanks to longstanding rules that force collaboration and consensus, commonly known as the filibuster. In the meantime, I’ve not given up on my work to pass my bipartisan Prescription Drug Pricing Reduction Act. Instead of harmful socialized price controls, my bill would not hamper new drugs from coming to the market. It would lower costs for seniors by $72 billion, save taxpayers $95 billion, cap out-of-pocket expenses at $3,100, and cap year-over-year drug prices in Medicare at the inflation price index. It would also reduce costs for life-saving diabetes drugs. In a nutshell, it would end unlimited taxpayer-funded subsidies to Big Pharma, an approach supported by the free market CATO Institute. My bill can clear the 60 vote threshold in the U.S. Senate if the Majority Leader would bring it for a vote. Partisan ideas have gotten us nowhere and Americans have paid the price. Lawmakers need to come to the table and do what’s right for patients and taxpayers.
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