WASHINGTON — Prescription drug middlemen are shifting away from rebates that have been blamed in part for rising brand drug list prices and are using new tactics, including charging drugmakers and pharmacists increasingly larger administrative fees and overcharging for generics. But the outcome is the same for taxpayers and anyone in need of expensive medicines: higher costs.
The changes came to light at a Senate Finance Committee hearing Thursday on the impact of PBMs on drug costs — a meeting that made it clear both parties are considering reining in common industry practices. Of the five panel members who testified at the hearing, just one, University of Pennsylvania Wharton School professor Lawton Burns, had anything nice to say about PBMs. Members of both parties complained about the murkiness of PBM business practices and the incentives of the system, which Sen. John Thune (R-S.D.) said he would “blow up” if he could.
It’s a new focus for Democrats, who largely spared PBMs in the major package of drug pricing reforms they passed last year. That law even benefited PBMs by putting on ice a Trump-era measure that would have undermined the rebates that are key to PBM profits.
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