Chairman Carter's Opening Statement at Health Hearing on How Reining in PBMs Lowers Costs

Let me begin by welcoming everyone to today's hearing on how reining in pharmacy benefit managers or PBMs will drive competition and lower costs for patients. Before I dive into the policy, I want to take a moment to address the true reason why we're having this hearing today, and that is patience. Patients like Matthew, Matthew is a 16 year old Georgia resident who suffers from a rare genetic disorder. CVS Caremarkt denied Matthew's access to a life-saving drug that he had been on for 2 years. And as a result of that, Matthew was forced back into the hospital. Let me be clear, PBM's greed, greed, scent, a 16 year old back to the hospital in critical condition while tragic, this story is far from unique. So how did we get here? PBMs or the pharmaceutical supply chain's hidden middlemen that are driving up costs for prescription medications, delaying access to necessary treatments, adding hoops for patients to jump through, and robbing hope from patience. They have only created perverse incentives throughout the drug supply chain. They're extensive market control has only grown due to consolidation and vertical integration leading to less competition and decreased patient choice. After nearly two decades of consolidation. The PBM industry is now dominated by 3 companies that control over 80% of the market. 3 companies that control over 80% of the market. They own or owned by insurers and have vertically in horizontally, horizontally consolidated their businesses to own doctors, pharmacies, group purchasing organizations and more. One of them even owns a bank. We have heard directly from our constituents that the harmful and anti-competitive tactics of some PBMs have only gotten worse and the congressional action is desperately needed. We've heard a constant stream of reports that some PBMs are reimbursing independent pharmacies less than the pharmacies they own. For example, a Mississippi audit revealed that Optum pays its own stores up to 22 times, 22 times what it pays independent pharmacies for the same drug. How are you supposed to stay in business when you competitor makes 2,200% more than you do for the same, the exact same service. The answer is you don't. Unfortunately, you don't. In 2023, there were over 300 independent pharmacy net closures. Almost one per day. Unfortunately, that trend continued in 2024. Pharmacists are some of the most accessible and highly trusted healthcare professionals. Yet PBMs are putting pharmacies out of business and removing patients' access to care. We now have pharmacy deserts and rural and underserved communities. That's affecting the accessibility, affordability, and quality of health care for all Americans. As I say all the time, whether you're a Republican, Democrat, or Independent, we all want the same thing. We want accessible, affordable, quality health care. Recently, the Federal Trade Commission released its second interim report, which found that PBMs charged significant markups for cancer, HIV and other critical specialty generic drugs by 1000% and many others by 100%. Another egregious example of PBM's abusive taxpayer funded programs is the United States Postal Service health plan. In an audit released in March of 2024, that the Inspector General of the US Office of Personnel Management found that Express Scripts overcharged the health plan and the federal government, nearly $45 million. $45 million. Thankfully, President Trump has committed to holding PBMs accountable. I commend him, and I look forward to working with this administration to drive solutions that costs for patients at the pharmacy counter. The House Energy and Commerce Committee has made common sense. PBM reform policies a bipartisan process. Last Congress, this committee advanced bipartisan legislation that saved significant taxpayer dollars in Medicaid managed care programs, and for the first time in Medicare Part D, enforces reasonable and relevant contract terms to support pharmacy's ability to serve patients in addition to delinking PBM compensation from this. Father, this committee champion reporting requirements which would increase transparency by shining a light on the opaque drug pricing system that is driving up drug spending for patients and employers in addition to harming pharmacies. Americans deserve and expect protection from inflated prescription drug costs. Ford pharmacy closures and barriers to healthcare access. I look forward to working with my colleagues on both sides of the aisle to enact these meaningful PBM reforms for patients like Matthew who are suffering at. At the expense of PBM's abusive tactics.