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PBM lobby chief sees "opportunity" in Hill pause

The Capitol dome on top of a pill bottle

Illustration: Sarah Grillo/Axios

The head of PBMs' top lobbying group sees the lull in congressional health activity as an "opportunity" to make the case for their companies' value and to warn against proposals that would change the way the companies are paid and impose new regulatory requirements.

Why it matters: PBM legislation is likely to be back on the table in a lame duck session, but the monthslong pause after Congress failed to get proposals in its March funding deal could potentially give the industry time to regroup and push back.

What they're saying: "Congress has chosen to pump the brakes for a few months around the conversation on PBMs and health care broadly," Pharmaceutical Care Management Association CEO JC Scott told Axios today.

  • "We see this as an important opportunity point to get back to basics on education about the value that our companies deliver, and the importance of avoiding unintended consequences of escalating drug costs by advancing legislation that hasn't been fully thought through."

The group, which has been taking heat for PBMs' role in drug pricing, has been arguing that employers and plan sponsors have differing needs, meaning Congress should not step in to limit how PBMs can be used.

  • "We continue to focus in on that need for participants in the market to be able to shape their arrangements the way that [is] going to work best for them," Scott said, noting that "pay for performance" can incentivize the PBMs to achieve more savings.
  • He pointed to the sweeping Medicare changes from the IRA, including drug price negotiations, to argue that further change "when we haven't even played out the latest raft of changes," is a risk.

The other side: Critics of PBMs, including lawmakers of both parties and pharmaceutical manufacturers, have argued that the companies are engaged in gimmicks that skim too much off the top for themselves and don't share savings sufficiently with patients.

  • Asked about better addressing out-of-pocket costs for patients, Scott said that "it's up to the plan sponsor, the employer, to make the decision on how they're going to utilize that value that the PBM has delivered."
  • That could involve lowering premiums, reducing out-of-pocket costs or adding benefits.
  • He also said drugmakers play a major role in setting the list price of medicine in the first place.

Between the lines: PBMs are also taking incoming fire from pharmacies, which argue that some rural drugstores are closing because they are not reimbursed enough. Pharmacies are spread out across the country and can be a powerful voice in lawmakers' districts.

  • Scott said it's not about "countering or attacking" pharmacies, and pointed to PBM programs that he says support rural pharmacies.

The big picture: PBM proposals — including requiring the companies to pass rebates on the plan sponsor and "delinking" their compensation from the price of a drug — could be revived after the elections, when Congress will be looking for health measures that generate savings to help pay for priorities like extending telehealth flexibilities.

  • "I would anticipate there will be a health care package of some size and scope," Scott said. "And we would anticipate that there's the possibility that PBM-related measures could be a part of that."
  • But, he said, part of the reason that proposals have not passed so far is that multiple committees with jurisdiction haven't been aligned.
  • "What I sensed was this growing recognition among committee members who are part of that negotiation that they weren't fully comfortable with the possible consequences that the legislation could lead to higher prescription drug costs."
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