(The Center Square) – A bipartisan group of lawmakers on Wednesday called on pharmaceutical companies to provide increased price transparency and lower costs for drugs.
Elected leaders on the U.S. House Energy and Commerce subcommittee on Health questioned pharmaceutical company leaders over their role in rising prices for prescription drugs. Several Congressional leaders accused pharmacy benefit managers of inflating drug costs beyond reasonable prices.
UnitedHealthcare, a leading insurance provider, reimburses its own providers an average of 17% more than it pays independent providers for the same services, according to a study published by Health Affairs.
The bipartisan panel offered various solutions to address rising drug costs. U.S. Rep. Morgan Griffith, R-Va., suggested pharmaceutical benefit managers operate as fiduciaries in order to leave them with greater liability in cases where certain treatment or coverage causes suffering and harm to a patient.
“There’s still going to be tough choices that are going to have to be made, but you would have more confidence that those choices are based on doing the right thing as opposed to making the most profit,” said James Gelfand, president and CEO of the ERISA industry committee.
Lawmakers argued the nation’s top insurance providers use vertical integration to take up a large share of the market and drive smaller insurance carriers out.
U.S. Rep. Nanette Barragan, D-Calif., said CVS Health, UnitedHealth Group and Cigna operate nearly 80% of the pharmaceutical benefit managers market. She accused panelists of using this large share to eliminate competition and drive out community pharmacists.
“You are part of the reason why people suffer and why it’s making it harder for people with cancer and HIV to get their drugs,” Barragan told the panelist at the hearing.
Douglas Hoey, president and CEO of the National Community Pharmacists Association, said the consolidation of insurance providers leads to higher drug prices for average Americans. He said the large pharmaceutical benefit managers can sometimes override a doctor’s prescription in favor of a more expensive drug.
“If a patient is prescribed a prescription, the doctor or the pharmacist can sometimes be overruled by the PBM because the PBM makes more money off of a different drug,” Hoey said. “When those patient choices are compromised, there’s less competition and higher prices.”
Lawmakers also highlighted figures that estimate private employer sponsored insurance premiums will rise by 6.5% in 2026, a higher hike than Affordable Care Act premiums.
Lawmakers across the aisle also called for more transparency in financial holdings among large drug manufacturing companies. U.S. Rep. Greg Landsman, D-Ohio, accused leaders of the corporations of prioritizing investments that yield larger profits rather than lowering prices.
Lori Reilly, chief operating officer at PhRMA, said 30% of the company profits are reinvested into research and development. Landsman criticized her for that figure and questioned why more of the remaining roughly 70% does not go toward lowering consumer prices.
“When individuals decide to invest with our companies, there is an expectation for a return on investment just as there is for any for-profit company,” Reilly said.
