What went wrong with PBMs?

A busy week in Washington wraps with a Senate hearing on PBMs, House hearings on agriculture, and the final day of the USITC’s hearing on the expansion of the COVID IP waiver. (748 words, 3 minutes, 44 seconds)

What went wrong with PBMs?

The “benefits” pharmacy benefit managers (PBMs) once provided have been lost, as they now mostly help themselves while driving up drug prices, said lawmakers and witnesses at yesterday’s Senate Finance Committee hearing.

What went wrong? PBMs originally crunched data to help insurers get the best prices on drugs, but the innovation of Medicare Part D created an environment where PBMs could exploit their market power and reap profits, said Committee Chair Ron Wyden (D-OR).

Medicare Part D is a success story that uses market forces to keep drugs affordable for seniors, but “certain dynamics seem to drive list prices up, even as net prices, reflective of rebates and discounts, decline,” said Ranking Member Mike Crapo (R-ID), who called for PBM transparency.

A PBM premium: PBMs profit at the expense of patients and innovation and can create situations where “Medicare pays 21% more for the most common generic drugs than they would if purchased at Costco,” USC expert Karen Van Nuys testified.

“Quite simply, higher prices put more dollars into a PBM’s pockets,” said UC Law Prof. Robin Feldman. “It is not a free or fair market.”

What’s next: Sen. Wyden said he and Crapo want to work together on PBM reform, and Sen. Chuck Grassley (R-IW) noted his reintroduction of PBM transparency legislation, which passed out of the Senate Commerce Committee last week. Timing on possible floor consideration is still unclear.

Watch highlights here

Recap: Day 2 of the USITC hearing

The U.S. International Trade Commission (USITC) hearing on the World Trade Organization (WTO) waiver of COVID IP wrapped up yesterday—here’s what happened.

What’s happening at USITC? The U.S. Trade Representative is weighing whether to support extending the WTO’s waiver on COVID-19 vaccines to include COVID diagnostics and therapeutics. USTR asked USITC to investigate the issue, and the two-day hearing concluded yesterday.

Who appeared at the hearing? In addition to BIO’s Chief Policy Officer John Murphy, the witnesses included:

• BIO Board member Eddie Sullivan, President and CEO of SAB Biotherapeutics
• Dr. George Scangos, President and CEO of Vir Biotechnology
• Representatives from BIO members Aisling Capital, Eli Lilly, Gilead Sciences, and Merck
• Debbie Hart, President and CEO of BioNJ

Catch up on the issue.

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Secretary Vilsack, House members call for science-based approaches

The impact of animal health on humans, and the importance of a science-based approach to agriculture and trade, came up in a few congressional hearings on agriculture this week.

What happened: Concerns about antimicrobial-resistant bacteria entering the food chain through animals came up during the House Energy & Commerce Health subcommittee on Reauthorization of Animal Drug User Fee Programs.

A One Health approach, holistically addressing the health of animals, humans, and the environment, is essential to helping us control AMR, said Tracey Forfa, Director of the Food and Drug Administration (FDA) Center for Veterinary Medicine.

The role for FDA: Subcommittee Chair Brett Guthrie (R-KY) and Ranking Member Anna Eshoo (D-CA) asked about FDA efforts to facilitate responsible antibiotic use in animals to combat AMR. Forfa described a five-year plan on AMR control and stressed the importance of “science-based regulatory standards.”

Meanwhile, the Agriculture Secretary backed a science-based approach to trade during yesterday’s House Appropriations Agriculture Subcommittee hearing on the USDA’s 2024 budget. Vilsack touted the same message earlier this week in the Senate.

Asked about Mexico’s biotech corn ban, Vilsack assured Sen. Ashley Hinson (R-IA) Mexico would be compelled to comply with the U.S.-Mexico-Canada Agreement to follow a “science-based regulatory system” and accept U.S. corn imports.

Biofuels and climate: Vilsack also spoke of USDA’s role in supporting climate-smart practices that provide farmers income, as well as facilitating the feedstock supply and logistics enabling production of sustainable aviation fuel.

President Biden’s Friday: Visiting storm-damaged areas in Mississippi to assess recovery efforts before heading home to Delaware.

What’s Happening on Capitol Hill: After a busy week, Congress is in recess until April 17.