that.

gardening. we welcome everybody to this hearing. we're examining competition issues in the prescription drug supply chain pharmacy benefit managers, pbms, we call them, play a significant role in drug supply chain. initially, pbms primarily served as an administrative capacity, but their role has evolved and

they now exercise a growing influence on prescription drug supply chain. and as the middleman, they determine what medications a patient can use and how much the patient pays. at the pharmacy counter, pbms also become more consolidated. the three major pbms control, roughly 80% of the pbm market and many are vertically integrated with insurance companies, providers and more. this power drives up drug costs at the pharmacy counter. indeed, a recent report found patient out-of-pocket drug costs reached $98 billion in 2020 for a 25% increase in just five years. pbm cms claim on the contrary, that they help lower cost, yet

their business practices are opaque. we don't even know what they do. we know their impact. and they do everything in, their power to steer business away from the competition towards their entity. i'm committed to bringing sunshine and accountability to pbms throughout my 99 county tour of iowa. learned firsthand from patients and pharmacists the power of the role that pbms play in our prescription drug supply chain. to name one example last summer and i one told me her prescription medications that increase from $300 to $1,000 per month. another iowan wrote me recently saying she's scared. that's her word about her local pharmacy closing, which would leave a void in her community.

i hear often from rural iowa pharmacists about the vital services perform for their community. we have one in iowa independent of pharmacy with us today, but they don't know how much longer they can stay open. pbms are scaring more patients away from their local pharmacies through, lower reimbursement mail order and limiting patient choice. iowans are fed up with the skyrocketing costs of prescription and reduce access. americans are fed up as well. they're eager for congress to act, to put a stop, to pbm practice. so i've taken a all faceted approach to lowering drug costs, holding bpm and holding pbm cms accountable. i partnered with senator wyden

on our two year investigation, insulin price gouging. our investigation found that pbms encourage drug makers to spike the drugs list price in order to offer a greater rebate. this in allows manufacturers to secure priority place when uncovered meds, all at the expense of patients. i pressed ftc to study pbms, their impact on competition and prices. the ftc phase two interim staff reports are helpful, but i'm eager to get a full study from the ftc, complete with legislation recommending options. that's why this committee recently passed a bill entitled prescription pricing for the people act, which would hold ftc in producing their study in a timely manner, a timely report

on pbms is critical. if we can stop some anti-competitive pbm behavior. this very day arbitrary clawbacks and spread pricing are documented of pbms deploying those to fill their pockets with at the expense of patients and pharmacies. this has to stop. senator cantwell and have worked on a bill that we entitled the pbm transparency act through the commerce committee to direct the ftc to stop deceptive and unfair pricing schemes by pbms as well as require more transparency. i've also worked on and supported the finance committee's pbm legislation from the last congress, and i've talked to senator craig, both. and after we get done with some

important reconciliation legislation, he indicated he'd like move on in that area. for too long, pbms have played a powerful role in determining a patient's access to prescription drugs and their cause. pbms have expanded their role in recent years, but their pocketbooks have expanded in ways that don't add up based on the services provided. while pbms get richer, hardworking americans pay more and more for their patients, local pharmacies are shuttering. i'm hopeful that this hearing will shine light on how we can rebalance the power and hold pbms. i look forward to the testimony of our witnesses today. senator durbin, thanks very much. grassley if charges leveled against the members of the united states and they were accused of legislating, there was no to show it.

this is our fifth month of session. this year. we've had five bills on the floor of the senate. five. i want to thank chairman grassley for this hearing. this is a bipartisan issue. this is one where democrats and republicans, through your leadership, mr. chairman, others can really bring a measure to the floor of the americans, give a -- about the high cost of prescription drugs. it's a real worry for people as to how they're going to pay for the things that they need to keep themselves healthy and to avoid some terrible outcomes. people in the united states pay the highest prescription drug prices in. the world the highest in the world on average, four times more than people in similar pay for brand name medication four times. democrats, the first step to address this issue three years ago by passing inflation reduction act. it wasn't popular on that side of the aisle, but we passed it. among other things, this law

kept the price of insulin at $35 a month instead of $2,000 limit on annual out-of-pocket expenses. seniors. 2000 a year. still a lot of money for a person on a limited income, but at least it's a figure that they can think about and budget for. and it led the executive branch negotiate with big pharma to lower prices under medicare, something president biden used reduce selected drug prices by up to 79%. all that without a single vote the other side of the aisle. but between critical reforms, there's much more work we can do on a bipartisan basis. wouldn't it be something if we announced we're going to take one whole week and invite all the good bills you've mentioned and others to come to the floor? let's debate and vote them up or down. almost like legislating. one place to start. big pharma. billions of dollars to flood the airwaves with ads. you can't miss them.

patients tell their doctors need drugs that they can hardly pronounce xarelto. congratulations, america, for being able to pronounce the name of that drug so they can go skiing, golfing and whitewater rafting. i'm looking forward to it. only one other developed country in the world permits these outrageous ads that fuel demand for high cost drugs. you know what it is news chairman grassley, i have a simple bill to require direct a consumer drug ads to disclose those the price charged by the drug company. that's basic basic transparency to inform america. and it's been supported by president trump and the vice president as well. well, ought to pass it this year. another needed reform is the topic of today's hearing. pharmacy benefit or pbms? take any american at random the street and ask him what the hell are pbms? do they make drugs? no, they prescribe the drugs?

no. but they're a key part of pricing those drugs. the in america. they're the service middlemen that extract colossal profits from patients, doctors and pharmacies. the big three pbms, cvs express scripts and optumrx dominate the market control the flow of prescription is for more than 200 million americans and people. the street couldn't even identify who they. over the years, several large insurers, pbms and pharmacies have emerged creating vast conglomerates that ignore conflicts of at the expense of the patients, pocketbook and health. they engage self-dealing to steer patients to a pbms preferred pharmacy, and they squeeze out small rural pharmacies not just in iowa, but illinois, too, with lowball payments. pbms also abuse rebates, fees to manipulate their formularies, ensuring that they, not the doctors, decide which drugs

patients receive. have you ever had your cancer treatment delayed while you waited for prior authorization on your medication? you think a pbm have you been told you've reached a limit for the epipens you rely on to keep your child safe? thank a pbm. so who is? the cop on the beat? isn't there a federal agency that can address these. as it turns out is. it's called the federal trade commission. and under the last chairman, they led the effort to investigate these abusive practices. the ftc even filed suit against the big three pbms for their and unfair practices on insulin pricing. but in a brazen and plainly illegal, i'm afraid this administration fired the two democratic commissioners that stopped the progress of this case. if this committee cares about addressing pbm excuse abuses that make prescription drugs unaffordable more than every member should speak out against these illegal firings.

but enforcement is not the only. we need legislation. we need a legislative solution. address these tactics by pbms. better yet, we need a bipartisan, broad support it. congressmen came together. house and senate, democrats and republicans, to craft a package to reform the pbm industry who would stop such a package reform of pbms finally getting control prices? elon musk last december hours before a vote on this pbm agreement, part of the year end continuing resolution. elon musk with, his chainsaw, unleashed a barrage of tweets opposing the package. the house republicans caved. that was a relief. the struggling independent pharmacy in rural illinois or rural iowa was delayed. the world's richest man didn't like the bill. never mind that days after taking pbm reform, health policy expert elon musk tweeted what,

is a pharmacy pharmacy benefit? that was his tweet. i hope today's hearing builds on the bipartisan package of patent and competition bills we advanced earlier this year. but if we want to deliver real relief at the pharmacy counter, it's going to require our republicans and democrats to stand up to elon musk and his chainsaw. looking to cut anything in sight. i want to thank the chairman calling this hearing. the turnout shows, the level of interest. it also shows opportunity for republicans, the majority and democrats in the minority to finally get down to work and legislate. thank you, mr. chairman. see you. want to introduce your illinois witness and i'll introduce the other four. thank you. happy to do that. dr. sheetal kerger. do i pronounce that correctly? okay. medical oncol largest and health services researcher at northwestern medicine at northwestern university. feinberg school of medicine in chicago in 2024.

dr. karcher honored with the fellow of american society of clinical oncology distinct distinction in recognition of her sustained contribution to the field. thank for being here may ms. chair and follows. holds a doctorate pharmacy and an mba. she's chief pharmacy officer at novartis health solutions. in this role, she oversees strategy providing services. lumina, sara health services is focusing on clinical industry news, drug management, pharmacy network and procurement strategies across retail, mail and spatial channels. she's a licensed pharmacist in wisconsin. serves on the board of directors of the national association. specialty pharmacy and drug selection advisors committee or civic scrip. our next witness, dr. randy mcdonough, a constituent of

mine. he's co-owner of town pharmacy corporation of iowa. professor of pharmacy management and innovation at loma linda university school of pharmacy. dr. duno is published and has presented nationally and entrenched pharmaceutical care medication therapy management and implement patient care services and community pharmacy settings. he was recognized for his efforts in developing and implementing new pharmacy business models. he's a president. the american pharmacists association,. 2025 to 226. mr. j.c. president, ceo of pharmaceutical care management. prior to joining the association, scott served as chief advocacy officer for advanced medical technology

association and made for short where he oversaw government affairs and external relations. prior to his president position, mr. scott served as senior vice federal relations at the american council of life insurers. mr. scott has an undergraduate degree in public policy studies at duke university and j.d. georgetown university law center. professor neera soda. dr. suda is a professor at usc price school of public policy, where he also served as vice dean for faculty affairs and research. he holds joint appointment months at usc keck school of medicine and usc marshall school of business. dr. soda is founder, member and senior fellow at the usc

schaefer center for health policy and economics. his research encompasses. epidemiology, pharmaceutical markets, health insurance, medical innovation, medicare and global health. dr. suter has authored over 100 peer review publications and leading journals as. i won't name all those journals. work has been featured in major media outlets, including time's new york, the washington post, scientific american. with that, with that, i'd like to ask you to rise and we swear our witnesses that meeting. do you swear or affirm that the statement you're about to give before this committee will be the truth, the whole truth, and nothing but the truth?

so you. god? yeah, i see all of them affirming that. thank you very much. we'll start with you, ms. foust. thank you, chairman grassley. ranking member durbin. and members of the committee. my name is sharon foust, the chief pharmacy officer for navitas health solutions. thank you for inviting me here today to appear before you this morning to discuss competition in the drug supply chain. navitas supports many of the pbm reforms that you have been working on over the past several years and. i want to thank those of you that have met with us to achieve positive results. now, this is a transparent through pbm. it's different from the rest. now, this was far more than 20 years ago in the state of wisconsin. employee trust demanded a pbm that would pass through all rebates, didn't engage spread pricing and provided access to all their data. no such pbm existed. so a couple health plans got together and formed navitas.

now it is now by ssn health and not for faith based integrated health system. and costco who became a member or, became an owner following a significant amount of savings when they had navitas as a client based out of wisconsin, we have 2100 employees located across 40 different states and, operate in all 50 states, all lines of business accounting for almost 19 million lives. our model hasn't changed in the last 20 years. we still pass through all our rebates. we focus on the lowest net cost approach. quality of care. we contract with our own pharmacies and support rural and charge clients what the pharmacy is no spread. we give full access and auditability to our clients and we have auditable disclosed administrative fees, no hidden fees where because our partners innovate with us or our client are our innovators.

we provide high quality care. a decade ago, our clients came to us and asked a specialty pharmacy that that had same morals and pass through model as navitas. we created lumo sara which is a cost plus specialty pharmacy charging clients based on actual acquisition and a flat fee. we msrs model is not tied to the drug cost, so as incentives are aligned and patients are cared for with the highest quality. we also provide access civica script product an innovator in the insulin cost space and. we provide point of sale discounts that are pass for manufacturers. for example, our recent announcement with teva to provide a biosimilar stelara to 97% discount at point of sale. that's $29,000 off the list price per fill. that's a partnership that we feel disrupts rebates altogether and delivers immediate savings

to the plan's sponsor and the patient. and we feel that's meaningful. never say never forces a to use them as sera, nor do we financially penalize them for that. majority. our business is actually not from navitas. while i certainly understand the frustrations with traditional pbms pbms when properly aligned, serve as a counterbalance to drug manufacturers and facilitate access to pharmacy networks to meet the needs of patients in sponsors. i respectfully recommend to this committee continue to support increased transparency. it's absolutely critical to disrupting business as usual and ensuring competition to make sure we know dollars are flowing in system. consider reviewing the entire supply chain american could benefit from all parts of transparency in the drug supply chain, including wholesalers and rebate shippers because it is about legislation that would prohibit certain business models

as any other industry investing in business adjacencies can help improve costs and streamline care. you must encourage competition and the reduction of costs throughout the drug supply chain. consider language that focuses on behaviors and not broad prohibitions on on our ownership models. i thank you for inviting me to testify and for looking out for american families, families, business is and patients as the cost health care continues to rise. look forward to your questions. thank you. as follows. dr. shaw kerger. chairman grassley, ranking member durbin and members of the committee, thank you for the opportunity for me to be here today. my name is sheetal kircher. i'm medical oncologist at northwestern medicine in chicago, where i specialize in treatment of gi cancers. so pancreas, colorectal cancer. like senator durbin mentioned when i asked my colleagues or

patients what a pbm is, they have no idea. but if you ask about their experience obtaining specialty drugs, you will get a strong response. and a story of a patient who had delay in their care or could not afford their medication. while i'm speaking from the perspective, an oncologist. patients with complex conditions from rheumatoid allergy, gastroenterology, other specialty is faced similar challenges. so a few weeks ago i met a 46 year old high school math teacher from the suburbs. he was the kind of guy that you would want teaching your kids energetic, engaged, aged, had two kids of his own. he'd been dealing what he thought was constipation, too much junk food, not enough water. but unfortunately what he was dealing with was much serious. he has a locally advanced -- cancer that was nearly blocking bowels. so within 48 hours, my team including surgery, radiation oncology, we had met him

reviewed his labs, his his scans, his biopsy. and we had developed a treatment plan with curative intent. time was absolutely critical. i entered his oral prescription into our emr directed it towards our in-house source hospital based specialty pharmacy. that's a credited design to work with my team. but just happens with about 60% of the medicaid agents that we prescribe. the pbm redirected my prescription to a special a different specialty pharmacy, one that they owned. we had no say in the matter. then we waited two weeks past. we submitted documentation. clinic notes. pathology reports justifying a treatment plan that followed every national guideline. during that wait his symptoms worsened and he desperately

wondered why he had not started treatment yet. that is what we're up against. first pbm, cms do not offer the specialized expertise and support that patients with complex medical complex conditions need. cancer therapies requires precise handling close monitoring and a deep knowledge of the disease are. our pharmacy is staffed by oncology trained clinicians who don't just fill prescriptions. they educate patients, track adherence, manage side effects, and communicate with my team. this communication keeps safe out of the hospital and keeps them on their treatment. when appropriate, our team finds financial assistance, charitable foundations, copay programs to help reduce out-of-pocket costs for patients which oftentimes is what's standing between them taking the medicine and not.

this is something that the pbm don't typically do. and second, pbms impose utilization management practices and medication switches that can delay. so clinicians, patients we recognize that there needs to be some level of utilization management like prior authorizations in order to ensure that these expensive, potentially toxic medications are used appropriately. we get that. but when pbm owned pharmacies are only option, these safe guards turn into major roadblocks. complex approval process. just prior authorizations will delay for days or weeks because of a lack of integration with our care. our specialty pharmacy can accelerate these approvals because they have direct access to clinical records and it avoids this back and forth that literally is sometimes with the

fax machine which delays. so pbm policies can also have unilateral drug substitution. so for my patient, i a low cost biosimilar. and the pbm replaced with a brand name likely due to rebate incentives. so when we're trying do the right thing prescribing biosimilar laws for costs, we have substitute actions that are done without consulting. it's unclear who benefits from those savings. it. does the payer benefit and? most importantly, do my patients benefit? finally, pbm owned specialty pharmacies contribute to waste when therapies change as they do a lot. my pharmacist knows immediately and pauses to prescribe option because of the discount act of pbms. oftentimes my patients will have like extra medical ones that we are literally thrown away. these are tens of thousands of dollars that we are throwing

away. so caring for patients with cancer is demanding, oftentimes heartbreaking and a true privilege. nothing is more difficult, the patient or for me as their doctor is telling them that they have cancer. it marks the start of a journey that is defined by urgency, uncertainty and a desperate need for coordinated care. committee has a meaningful opportunity to help reform the policies and practices that are causing delays, confusion and burden. thank you for the opportunity. i'm happy to take any questions. good morning. grassley ranking member durbin and members of the committee. thank you for inviting me to testify this morning on behalf of my patients, i would also like to express my gratitude to chairman grassley for your years of leadership on pharmacy

benefit management or pbm reform. my name is randy. i live in iowa city, iowa. i'm co-owner and ceo of tom cross pharmacy corp. for the past 19 years and since march of this year, i have served as president of the american pharmacists association or representing our nation's over 300,000 pharmacists at every side of care. i want to begin my testimony by providing with a real patient case that provides an example the egregious business practices of pbms as in the time effort and risk i endured to help a patient. the patient as a young man in his early twenties. he has struggled with obsessive compulsive disorder or ocd, to the point where it was so debilitating he had to be hospitalized. finding the right for this patient took time and effort. excuse me. and we worked very closely with his position during that time. unfortunately the medication

that finally worked cost us $728.35 hour reimbursement from the pbm excuse me, reimbursement. the pbm was only $10.33. i followed all the appropriate processes of the pbm to dispute the reimbursement amount, but it resulted no change in a lack of response from the pbm. i took more drastic measures and went against my contract with the pbm to contact the health plan directly to see if they could help me with this dire situation. i told the health plan that i'm being put into an ethical dilemma. as a business owner, i cannot afford to fill this medication. but as a caring health care provider, i recognize that this patient was benefiting greatly from this treatment. it was only because of my tenacious persistence that i got a partial resolution due to the health plan pressures. the pbm relented and finally

increased the amount of reimbursement but never to the level where the reimbursement exceeded my cost. now perhaps you're thinking that this is just an extreme example, but i challenge you that it's not community pharmacist and their staff across this country are being forced into this ethical multiple times a day with multiple patients to the point where decisions are being made to even carry or stock medications, especially name brands. and this is not just the brand medication problem as a reimbursement for is based on nebulous non, transparent and supposedly propriety marie maximum allowable cost or mac pricing in which the reimburse for the drug is many times below our cost. and there's a minimal no professional fees to offset the cost to dispensing. in essence it has become the rule that there is a net negative reimbursement. a large percentage of medications filled in community pharmacies across this country. so what does this business model

due to the infrastructure of community pharmacies? to be candid closures in this leads me to my own practice challenges torcross pharmacy corporation has been in existence since 1963 is comprised of five community pharmacies in a closed door long term care pharmacy. last year, our total net income for these six pharmacies was over a negative. of $116,000. this has forced us to make some hard decisions at the beginning of the year. we were deciding to close a pharmacy in one of our rural communities because of its financial challenges. still, we were also concerned. another ethical dilemma. that it was the only pharmacy within a 15 mile radius, which is also an issue access for some of our older and sicker patients who may have physical limitations, transportation challenges. instead of closing it, we it into a hybrid teller pharmacy in which pharmacist is present two

days a week. the other three days is managed by a technician and a pharmacist. remote stand to provide clinical services. even in this model, our net, our net income for the first quarter of this year was a negative. $80,000, challenging our decision, not to close. more recently, on may 1st, we decided to close another one of our rural pharmacies because there was no viable financial path for us to keep the pharmacy open. so now my corporation has become one of the statistics and i will own. more than 200 pharmacies have closed since 2014 and a record 31 pharmacies closed in 2020 for spread pricing under water max fees, clawbacks true ups, rebate opacity take it or leave it contracts. generic rates and patients during our terms that we have become familiar with or heard about when talking about pbm that are harmful business practices meant these issues stem from a lack competition and

transparency from pbms. but at the end of the day, i just called it a broken system, a system where i want to provide, but has become financially infeasible. a system where a community pharmacies, where an access point for patients. and now more and more pharmacy deserts are merging a system in which profits are emphasized over patients in a system that's about ready to implode upon itself. the race to bottom has ended and i with my community pharmacy colleagues can no longer survive. thank you again for this opportunity to testify at this very important hearing at aa is committed to working the committee to enact meaningful pbm that will safeguard community and ensure patient access to essential care, particularly in rural and underserved areas like mine in iowa, which need it most. and i'm happy to answer any questions. thank you, chairman grassley,

ranking member durbin and members of the committee. i appreciate the opportunity to today's hearing on behalf of pma, we represent the nation's pbms, which negotiate and administer prescription benefits for 289 million insured americans. everything, pbms do relates back to our mission of lowering drug cost and creating affordable access for patients. no employer union or other plan sponsor is under any obligation to hire a. nearly all choose. choose to hire one because our companies lower costs. pbms negotiate with manufacturers. others partner with pharmacies and deliver $148 billion in savings annually for employers, unions, retiree plans, government programs and patients employers and other health plan sponsors not only choose whether to use a pbm, but also have the final say on the pharmacy benefit design. best meets the needs of their populations. they choose how to set up their contract and how to pay for the services, and they choose how best to use the savings

delivered by the pbm. and there is a lot of choice. the pbm market is competitive and evolving. today we have more than 70 full service pbms operating nationwide and new entrants are continually emerging and winning market share with 18% increase in the total number pbm businesses over a five year period. pbm business models are structured in a variety of ways, adding to the choice and optionality for employers and plan sponsors. some pbms are standalone. some standalone companies focus only on certain therapeutic areas and categories of medications. other pbms may have an affiliated male specialty or retail pharmacy or be part of a larger health care company, which can add to the ability to offer a total care package to patients enrolled in a plan. restrictions on this business model diversity and pbm affiliation with pharmacies would reduce pharmacy access and available it, not improve it. it would reduce in the pharmacy market and could raise costs,

not lower them. the choice of what type of pbm to hire is up to the employer plan sponsor to determine what assistance they want in administering their health care benefits and what will deliver the highest quality, best health outcomes and lowest cost for the enrollees they serve. pbms compete in a rigorous rfp request for proposal process on a regular that requires them to constantly innovate to retain existing customers and grow new business. so reports of employers and health insurers changing pbms only underscore the competitiveness of the market and the importance choice. we hope to use today's discussion to clarify any misunderstanding about how pbms work. our industry supports choice flexibility for clients, maintaining robust competition in the market, providing transparent, actionable information to employers, sponsors, patients, prescribers, policymakers, and maintaining a healthy pharmacy market to be there to serve in addition and

to be clear, our companies support and advocate for lower list prices on all prescription drugs. our mission is to negotiate for lower net costs for employers and clients, which means lower costs for patients. a lower list price means a better starting point for those negotiating. and we have been actively calling on drug companies to lower their prices. i do not dispute that there is an affordability challenge many patients and a need to continue to improve how the system serves consumers. understanding drug costs must include a look at the entire chain, including drug companies, wholesalers, pharmacies and other stakeholders. and that is why we support chairman grassley's prescription pricing for the people act to take a holistic approach to addressing prescription drug affordability. i will tell you, pbms are not waiting for government intervention or mandates to address what the market is asking for. our companies are already adapting and innovating to meet to meet demand in the market, to lower out-of-pocket costs for

patients and improve transparency for plan sponsors and consumers. pbms are putting in place new options for partnering with and reimbursing pharmacies, focusing on programs that increase reimbursements in rural areas, in particular, and expand the scope of services pharmacists can provide for patients. we urge policymakers to recognize these innovations happening in the market when considering drug pricing legislation. and we also encourage the committee to address the underlying price of drugs, which are uniquely high in this country. pma applauds and strongly supports the bipartisan work of this committee. to address drug company patent abuse and dtc advertising so that we can have more competition and lower costs. congress is focused on lowering drug costs and improving care for patients. so are we. pcmag looks forward to working collaborative fully with the committee and other stakeholders to address prescription drug affordability and improve system for patients. thank you for including me today. i look forward to your questions. q mr. scott, now, before the

soda. chairman grassley ranking member durbin and members of the committee, thank you for the opportunity to testify today about competition issues in the prescription drug supply chain. my name is needed to and i'm a senior scholar at the leonard schaffer institute for public policy, government service and professor at the university of southern california. the opinions i offer today are my own. i've been studying the economics of the prescription drug industry with the particular focus on the supply chain for a decade. today will share key findings from my research that highlight the need for reform and also suggest reforms that can make the markets work better for the american patient. in 17, my colleagues and i conducted one of the first comprehensive studies of the supply chain. our research revealed that out

of every hundred dollars in prescription drug spending, about $40 went to firms in the supply. this was striking because. it challenged the conventional narrative that manufacturers were solely responsible for high prescription costs. when i presented these findings, i often got the question, okay, but are these firms making too much money? to answer that question, we analyzed the financial performance of publicly traded firms, the supply chain, and compared their returns to the average return for the s&p 500 companies. we found that insurers, pbms and pharmacies that are often considered in one corporate entity earned significantly excess returns. compared to the s&p 500, this findings suggest that the prescription drug supply chain is not competitive and economic

rents are beyond those enjoyed by large firms in the us economy. my on insulin markets suggests that pbms seem to be leveraging their market power and extracting profit at the expense of patients. we found that between 2014 and 2018, net price is received by manufacturers decreased by 33%. however at the same time, the share of insulin expenditures captured by pbms increased nearly three fold, and the same time, overall expenditure on insulin increased modest. so put simply, pbms are doing part of job negotiating prices for all manufacturers, but failing at another crucial aspect ensuring that these savings benefit patients and the health care system more broadly.

my recent research on vertical integration, the supply chain that is different stages of the supply chain. insurers pbms, pharmacies are consulted under one single corporate entity. i believe such vertical integration raises significant entities concerns. by creating incentives to decide the vantage, pharmacies and plans that compete with the pbms own pharmacies and plans as also noted by chairman grassley in a recent study, the medicare part d. market, we find evidence suggests that vertically integrated pbms raise the cost of rival plans and increase premiums for medicare beneficiaries. i want to conclude by offering some policy recommendations. first, establish fiduciary responsibility for. require pbm cms to act as fiduciary for their clients so that they are legally obligated

to act in the best interest of health plans. and their members. second increase price transparency. this will promote competition in the market and it will allow payers and policymakers to evaluate pbm performance whether they are delivering the value they say they deliver. third, reform the rebate system based and should be cost sharing based on the actual post price and not list price. the current system of rebates inflates list prices. in fact, my research finds there is a one for one relationship between rebates and list prices. fourth, asked ftc and doj to scrutinize integration on antitrust grounds. and fifth, get rid of information asymmetry, which is have all pbm clients should have unfettered access to their

pharmacy claims data so that they can evaluate the value and efficiency of the drug benefit. in conclusion, as our pharmaceutical distribution system should work for patients, not against them. thank you for the opportunity to testify today? i would be happy to answer any questions. i'm going to start with my iowa constituent. last year, 29 iowa pharmacies close, many of which were in rural and have served their communities for decades. you want a small group of rural pharmacies that recently had to close some. what legislation would you like to see congress pass to help rural pharmacies like yourself and the patient you serve. and since bureaucracy can work faster than congress, is there anything that hhs can be doing that would help along this line?

senator grassley, i appreciate the question before answering your question. i do have a couple of points. one is, i want to be clear. pharmacy deserts occur only in rural areas, but also urban areas negatively affecting the care of our most vulnerable patients. the second point is that community pharmacy is much more than just a place where prescriptions are. it's a place where patients access to a trusted health care partner. it's a place where patients receive health care services ranging from medication management, point of care testing and immunizations to health promotion and chronic disease management. it's a place where care, coordination and medication service help patients achieve optimal outcomes. and it's a place where pharmacies and their staff work closely and collaboratively with other providers and community based organizations to optimize patient care. to answer the question, as far as the first part of your question and legislate again, i

think a good place to start is your bill. 526 the pbm act, where it bans deceptive and unfair pricing schemes, prohibits pbm clawbacks of payments have been made to pharmacies and, improves transparency about pricing and pharmacy. next i'd like to address the fair reimbursement of community pharmacies and medicare part d. senate bill five or s eight to the patients before middleman act and enhances the pbm transparent ac and accountability to reduce prescription cost for seniors. also ensures all treatments are fair treatment for all pharmacies as it relates medicare part d contracts. but what's missing is addressing reasonable and relevant part d reimbursement cms to make pharmacies whole. lastly i talked about the services that we beyond

prescription dispensing. i do think we have to develop some of a payment model for those services that is having an impact not only on patient clinical outcomes, but also on total cost of care. your second part of your question is about hhs and what they could do. and is it to provide authority for the secretary hhs to fix medicare part d payments for community pharmacies to ensure fair and reasonable so we can continue to provide care to our senior patients. thank you. ms. my pbm transparency act to require to be fully transparent about how much money they make, prove their value, what kind of transparency does novartis provide to its clients and what does real transparency look like. thank you. navitas provides full we provide

access to all the data, all the clients data and access to what pharmacies are paid in. auditability of that as a as a fiduciary response representative for our plan sponsors as i think your bill does a great job of introducing transparency and that's really really needed in this industry. okay. next, i have a question, professor. so the primary response ability of a fiduciary is to run health plan solely in the interests of participants and beneficiaries for the exclusive purposes purpose of providing benefits. at least five states have imposed fiduciary or duty care requirements on pbms. should i think you this in your statement do you want to expand on what you said in your statement about fiduciary responsibilities? sure. thank you for the question, senator grassley.

i think the price transparency bill that you have proposed compliments, fiduciary responsibility. so the idea of price transparency is to figure out if you're getting value for your money or not. if your pbm is acting in the interest of your members or not, and what fiduciary responsibility is it legally obligates the pbm to act in the interests of the members? so if you find out that the pbm is not acting in the interest of your members, you have some recourse to address that. that issue. so i think fiduciary responsible combined with transparency can make the markets work better for the american patient. okay, senator durbin, thanks, mr. chairman. i may be mistaken. i may miss this completely. i listen to the witnesses, but i suspect that we have a federal issue that has disclosed to us this morning at this hearing. i suspect that our witnesses

have given us a challenge as to whether we're going to do something it. i suspect there is a possibility that we may even have to legislate pass a bill, make a law. and i think you've spelled out in graphic terms why is essential my challenge to colleagues on my side of the aisle on the other side of the aisle is let's not walk away from this hearing and say, oh, my god, that's really a mess. let's do something that we elected to do and legislate. the chairman has some legislation i am co-sponsoring of it with him. each of us has idea, i'm sure, because we wouldn't run for office if we didn't. and we have a challenge that's given to us by this panel. dr. kurtzer. i tried to imagine you're walking into that patient's room day after after day and explaining that the therapy he needed to stop the in his body was being held up because of a fight, a jurisdictional fight

about how to get the drug to the. how in the world do you possibly explain that to your patient. it's interesting because, you know, as an oncologist, we're very well trained to deliver bad news. you know, i can tell patients that they are have a cancer, that it's progressed, that maybe ultimately need to be transitioned to hospice care even. but what i've noticed since i started practicing in 2011 is increasing conversations that i am not prepared for. it's interesting that i can have a conversation about end of life, but i'm having more and more about affording our medication and making these difficult decisions that are well beyond the four walls of our clinic and involved just obtaining their medication. so as far as fast as we're hustling in clinic to see patients and get them what they're need, we hit this roadblock. that is really difficult to deal

with sort of my colleagues. what if this was a member of your family? what if it was your spouse or your child that we were talking about? i mean, that really brings it home. and dr. mcdonough, would you dr. herter told us about your belief in your professional to the patient. really rings true to me. you care. and because care that patients are going to get better treatment. and the bottom line, professor sood, is you've gone through and analyzed these from an economics viewpoint. i'm really impressed with you found in mr. scott. the bottom line is this you argue that pbms give us competition, choice and flexibility and the evidence is absolutely to the contrary. what you just heard the illustrations on both sides of you are proof positive that that is not your goal. i could go into vertical integration. the opioid crisis spell out what pbms have done over and over

again. but how in the hell do you answer this? dr. carter's plea to us to give her patient the he needs to get well and into a battle over pricing. i mean, you say, well, you go into it voluntarily. you pick a pbm voluntarily. clearly, that's not exactly the case. voluntarily. she had a pharmacy in her hospital that she wanted to use. but you didn't give her that choice. i don't see how pbms in the examples we've heard today, have done the right thing for the patient. they've done the right thing for their bottom line. please, mr. durant. thank you for the opportunity comment on some of the issues that have been raised. and i want to start first by just expressing my sympathy for the experience that dr. kirchner shared. my father also suffered from cancer at the end of his life and then alzheimer's disease and the coverage that he had through his health care benefit, the way that that system worked in both

instances to make sure that he was getting the drugs he needs. and you know about alzheimer's disease with that requires constant changes and dosage adjustments the way that that worked properly allowed my mom and i to spend time focusing on him at the end of his life instead having to focus on some of those administrative challenges. and that is the way we believe the system should work for all patients. we to make sure that is working better, as has been said before, those those steps can be important in order to make sure that we are getting the right medicine to the right patient at the right cost and at the same time, in today, 2025, the way that the system we should not be using fax machines. we should be at a place where that exchange with the physician can happen a more instantaneous place so that we don't have unnecessary delays, especially in case of pharmaceuticals like cancer. mr. chairman, to my to you and to my colleagues, if this isn't a call to action i don't know what is. imagine your own member of a family you love going through this mess because we failed to

change the law. i hope we do surgery surgery. thank you very much, mr. chairman, to all of you. mr. mcdonough, i'd like to start with you. with pbms controlling, formulary design and drug access. what prevents pbms from steering patients their own pharmacies, even if cheaper alternatives, exist? it doesn't mean they're so. one of the issues that's happening is that patients are being steered to a lot of times the mail order or to the brick and mortar pharmacies that they own. and so we don't have that. and what's also concerning to me is the confusion that they bring into the marketplace, especially for older patients who receive letters and. they're not sure if they're supposed to go mail order. they don't know they have a choice. and they feel like if they don't do it, they're going to lose their benefit. and so they feel like they are being forced to do that. we see all kinds of letters that come to the patients that have come to us to indicate that just

adds to the confusion. i can imagine this has the potential at least to harm independent competitors and force consumers to pay higher prices. we've seen that absolutely. absolutely. now, mr. scott, in the negotiation with drug to scale a pillar appears to be really important to pbms. and one can understand why could be of a top three pbms are vertically integrated and they control i understand it. what about 80% of the market. so in light of that, how do smaller pbms compete with the scale, the vertical integration that the big three, who control 80% of the market have? i'll try to be quick. i went too long for mr. durbin's question. i had just real quick to address your staring question.

pbms and design networks. when an employer hires them, just like we have a network of doctors and hospitals, a network of pharmacies, and they're looking at three considerable options when comes to retail, geography and then quality for the patient and and whether it's an affiliated pharmacy or not. those are the considerations in designing network. and the data would tell us that there are not higher reimbursements affiliated pharmacies than unaffiliated pharmacies. if there were and it was costing the employer more money than the employer would not use that pbm any more. on point about integration in the marketplace and scale. yes, scale matters in terms of being able to use group purchasing economics to achieve discounts from drug. that's an important piece of what pbms. smaller pbms, in addition to trying to provide discounts, can offered a more tailored, unique level of service benefit patient experience. other considerations an employer may have in mind when choosing who they want to partner with. so it really gives optionality

in the market. and the smaller pbms compete by doing things in a different way than some of the established companies. okay, so you're insisting they can compete, notwithstanding that. now, professor said with vertical integration, spread pricing and the somewhat inherently opaque nature of these rebate negotiations, how is pricing distorted and how does impede competition? so if you focus on vertical integration, what it does. is it creates conflicts of interest. so for example, if i'm a health plan and i'm competing with you and if i have my brother who owns a pbm, so let's assume jesse is my brother and he owns a pbm and he's providing services to you. how do you feel about that? that creates a conflict of interest. you're like, hey, he's my brother. he's going to provide services to you that because you're competing with me.

so i think there is that conflict of interest that arises in dealing with health plans. it also, as randy mentioned, it arises steering patients to their own pharmacies rather than independent pharmacies. and as you said since these plans are all vertically integrated, if i want to enter this market, it's a big hill for me to climb because now i need to be a pbm, i need to be a pharmacy, i need to be a insurer. all at the same time. and that is really tough to in this market. so what will be left with two or three big firms that control majority of the market, in your view, or those two or three big firms using their their scale and their market advantage so as to impede entry to serve as a natural restriction on entry into the marketplace such that others can't get into that marketplace. i think so that i think, again,

these conflicts of interest create, this incentive to kind of help your own pharmacies and own plans, which hurts entry of other pharmacies and plans which reduces competition in the market and which increases costs. thank you. white house thanks very much, chairman. good to have you all here for the hearing. seems to me that pharmaceutical pricing is the decision of the pharmaceutical companies and big pharma would like nothing more than a world in which they control the prices. they have huge sway in this building and they're opposition, if you want to call it that. concerns on price come from individual patients who essentially no market power. we've seen really significant

pricing abuses by. big pharma. we pay the highest prices in the world for great many pharmaceuticals here. president trump is responding to how sick americans of pharma pricing by proposing his executive order to lower it and u.s. pharmaceutical pricing and international standards. i think that's a signal of how things are going out there. in that environment. a pbm, right is the only institution really powerful correction to pharmacy hegemony over prices. now we a little bit of help by letting medicare do some negotiation that's a start.

we hope we can do more of that. but other than that, it's just an open field advantage for big pharma to roll over individual patients. no structural opposition. so a pbm done right. is actually a counterforce to, should we say, exotic pricing structures because they're able to buy at scale, they can apply leverage because there is excess profit baked into the form of pricing model. they actually can provide a pretty important service. i don't know about you, but when i turn on my ipad, i pretty much always now see an ad paid for by pharma trying to throw pbms under the bus for farmers pricing policies. now if you're a big pharma and people are mad about the way price your drugs and why americans have to pay, then essentially any other country

pharmaceutical costs then as trump noticed by announcing this next executive order, there's a pretty fed up public out there. and pharma's response is not lower its prices. but to move pbms in the line of fire and try to make them the source, the blame. so i'm sort of watching what looks a bit of a political strategy by big pharma to the finger at pbms. there are clearly with pbms and the worse problem is if the pbms and pharma are colluding. if the pbms and pharma are colluding to make the underlying pharmaceutical prices even higher and not about the basic pharmaceutical prices, so that they have a bigger margin, they can negotiate for their clients so that they can get a bigger

fee. then you have pharma and pbms engaged a essentially collusive enterprise to cheat the american consumer. that behavior we need to get rid of. but the idea that we need get rid of pbms when they're the only significant structural pushback on pharmacy pricing, i think would be a real mistake. and what i'm seeing, big pharma, that everybody's mad at them running all these ads, throwing pbms in the way of public irritation as if as if pharma doesn't control its own pricing. i, i worry this mr. scott, who sets the prices for pharmaceutical products and drug companies and drug companies alone. yeah. and you would agree with me that if drug companies and pbms are colluding to keep prices high

just to give pbms bigger share and kind of a general truth so that customer consumers still get screwed, that would be an abuse of the pbm model. and that is not happening. and you're pointing to the advertisements as good evidence there is no general truths we have been calling actively for drug companies to lower their lease prices on all prescription drugs. that's a key part of what we advocate. yeah, well, my time has expired, but i think there's a role for pbms here. and i think the most important signal we're seeing right now is pharma's ad campaign and trying to defend its exotic pricing techniques by putting somebody else in the line of political fire. senator whitehouse, you raised a lot of questions. the four bills that were in the last congress, one in the house, three in senate, none of them did away with pbms, but they all called for transparency. it seems the answer to all questions you raise will be solved least partly by

transparency. we worked on those bills together and finance. mr. chairman, we look forward to continuing to work with you on those bills. i think we just have to understand what the problem is here in order to get the correct solutions. and i thank you for that observation. senator tillis. thank you, mr. chairman. thanks to all the witnesses being here. i as senator durbin, was making some opening comments. senator durbin, i think we're probably going to leave this meeting also saying what a mess. and one of the reasons i think that we are as we talk past each other and we're not talking about the entire value chain. and until we do we're going to pick our favorite target, whether it's pharma, whether it's pbm firms, and we're going to keep our wheels. you take a look at bad policy i think in the aca everybody should have forgotten because took a haircut. nobody's talking about how wonderful it was that we had a 60% reduction in small molecule

research, which we all know is one of the most promising fields for therapies and cures going forward. so you got to understand the consequences if if some of these companies were so flush with cash and and we're not and can manage the risk why on earth are they publicly saying in board meetings that have a 60% reduction and collectively in small molecule research just one point i actually take. everybody needs to get out of the barber shop been saying this for years a haircut should be coming but everybody to be in the barber shop. the question is, are we going to end up with a haircut like mike lee's or one like john kennedy's and the. no offense, mike. i like your new haircut, but i know it. but but the point is, is we keep talking past each other. i can't even get tricare the biggest pbm for federal one that i'm on. i can't even transparency from them. i tried it in the prior.

i want to audit the tricare pbm least we can eat our own dog food right, and audit our pbm. but i get back in response to our request. pricing information is a heavily redacted report. this administration i'm going to try again. i tried it with abandonment castration. can we at least audit our own pbm and in a confidential way figure out what's in the black box? and i think if we start doing that systematically. professor sood i think some of your some of your insights specific into pbms are probably correct we're probably going to find out. i, i believe that for what they we have to recognize is the pbm mission has. as varied dramatically since it was first established. and so the question is, is that mission creep necessary three are not necessary? is it value added or is it adding? but until we get into a structured analysis and get everybody in the barbershop versus using this foreign this

forum to demonize a link in the value chain, then we're going to end up with the same old hearing that i've been to for the better part of ten years now. we do it every year it's great. love it. we hear some very insightful comments and we get nothing done. so i do think today and i have to respectfully disagree with the president. well, in the same that i've criticized, michael and the former president biden for a 60% reduction in small molecule for using march and writes trip waivers, everything else to this problem. i think they're wrong minded. what is right minded is to modernize pbms, figure out what their value added is, determine how we implement price transparency. and then we create something that has an enduring value for the only person i care about. and that's the patient. so i do have a quick question for for you, mr. scott. what's wrong with the mr.

professor seward's suggestion that pbms should operate as fiduciary just on basic level? the definition essentially a fiduciary is a person or entity who is in a position of control and decision making authority over another person's property or finances. the role of the pbm, when hired by the employer or others is to recommend and to administer at their direction. they don't make decisions for plan sponsors. they don't have that decision making authority. what else would need to change to make it reasonable? well, i think what a number of you have been pushing at around transparent is is an important thing to comment on because we have leaned in as an industry to try and engage with the committee, both sides of the congress on embracing transparency. if congress says you want to set a floor, then we'll work with you to set that floor long as our clients can choose additional add to that in terms of data, thank you. it's got a heart. i hate to break you off, sir grassley. i really think that one of the things that we should probably

do outside of the structure of a is to have a work group. for those of us are willing to participate, get all the players at the table that we get to have a good old fashioned debate versus the very limited question and answer that we have here and that be something if you're if okay with i'd like to follow your lead if not, then i'm likely to convene it myself that i can get everybody in the room and we have a very transparent discussion, comprehensive discussion about we fix the value chain and how we ultimately address this problem the most favored nation coming out of the administration, all these other things are short sighted, unsustainable that are not going to produce the result i do believe all of us on committee want to achieve. it's not what but we've got a very wide range of differences on the how. thank you, mr. chair. you asking. for the old rules and and health

and i think we'd have to get those to agree to that. senator --, thank you chairman grassley. ranking member durbin, for convening this. and thank you to, the panel for your important work. let me ask a few questions. if i might in my small of delaware from 2018 to 2020, delawareans footed the bill for over 24 million in unnecessary prescription drug payments, largely due to the practices that have been the focus of this hearing. and as a state we now enacted a series of pbm reforms laws notably all passed unanimously through our state legislature. i don't think that happens often in any state. so i'm glad that pbm reform has level of bipartisan support in congress, including bills led by chairman grassley, other members of this committee. in fact, a ban on so-called spread was one of the only provisions that i was glad to see in the house republicans

reconciliation bill. of course, would have chosen to use the billion in savings to fund community health and combat the opioid epidemic, not to give bigger tax cuts, but i'm glad for the opportunity discuss what reforms could bring transparency, lower drug prices, improve patient access. if i could, dr. kirshner. thank you for your on pancreatic cancer disease that's impacted my family specifically. i've received substantial outreach from delawareans about the need for pbm reform from clergy to cancer survivors. how do pbm practices make it harder for patients struggling with cancer treatment to access lifesaving medication. there's a there's a couple different ways and the patients don't know that a pbms even involved. right. but where they hit the rubber hits the road for them is like the disconnect between my prescription pad and then receiving the drug like some

black box happens when we can't fill it at our specialty pharmacies and that might be different within different specialties. so these are four highly complex chemotherapy drugs and so patients when we can't use our own pharmacy really negatively impacted. i've seen that directly personally with three family members who've died of cancer, but thank you for your work and for raising that issue today. if i could to mr. scott and dr. mcdonough. i've seen reports as high as 80% of rural and independent pharmacies receive reimbursement below the cost of and dispensing some drugs. the owner of an independent in southern delaware told me you can no longer even afford to stock certain expensive treatments for hiv. glp one's his reimbursements after pbm fees are unpredictable and he can't afford to lose money every time he dispenses

one of these. mr. scott, why isn't greater transparency into the reimburse spend process? and dr. mcdonough how can greater transparency help the playing field, particularly independent pharmacies and rural pharmacies? i'll go first and briefly to say understand the mechanics of how this works, because there is transparency when the pharmacy is choosing to contract to be of a pbms recommended network and more than 8080 5% of those independent pharmacies are actually empowering a wholesaler their psa oh pharmacy services administration organization to negotiate their behalf. you have three big wholesalers controlling 90% of the market. they're selling the drugs to the pharmacy, and they're negotiated in these contracts on their behalf. and that is the starting point for determining how to reimbursement is going to flow to a pharmacy in a network. i think transparency is key. you know, when you think about the physician writing the prescription and then the end user being the patient and normally filled out a pharmacy,

there's a lot of stuff that happens in between, right, where things are being siphoned off and everything and fees. and i think one spread pricing, you know is real we as an independent pharmacy we had a employer who approached and asked us if we would be willing do direct contracting with them. i was lucky that this ceo had had in an insurance agency and area and he said that you know i want to see what you if you give us a direct price, what would that would do that's been five years ago. they stay with us. they've saved a heck of a lot money. patients are happy because. they get to go to a pharmacy. it's going to provide services for them. and we actually made some where we can stay open. so i do think transparency along the line to find out what's going on. but i also think when we talk about rebates that's so opaque, what do we have to do to really understand about rebates and do we need rebates. i mean, that's a broad and a

radical thing of thinking about. but let's just start from the very scratch and saying, you know, can we do something where we know our actual cost? i tell you what my actual cost is because of rebates. so i do think we have to have a lot more transparency. ms. foust. dr. foust follow up on the point donna just made. should all pbms be to operate with the same level of transparency as yours when it to selecting drugs and obtaining rebates and what other practices could pbms learn from your company? yeah, we believe wholeheartedly in transparency and passing through rebates, especially as it relates passing that savings through to the client. all pbm should be have transparency across. the entire drug supply chain. and so that would be of great step. i think that thank you to all the witnesses today. thank you, jim. thank you. and senator kennedy, professor

sood, as i understand, 80% of the pbm market is controlled by three companies, three pbms that are vertically integrated. is that right? that is correct. does your research show that the prices that consumers pay are higher than they would be if those companies were not vertically integrated? so my research on medicare by give me an answer partially. what do you mean partially? they're higher or there are more so such thing as a partial what? what i find is that medicare d premiums are higher as a result of vertical integration. okay. well, then why don't we i'm all for transparent.

mr. chairman, i want to say that, but why don't we skip the foreplay and go right to the sex and get out? vertical integration for four part d would you accept an amendment to your bill like that? i don't want to answer that question right now because i want to study the would you support that? mr. scott, let me? just guess what your answer is. no, sir. and i explain why. no, you speak sanskrit. i mean, i'm sorry. you know. you're good at it. and i know your job is to protect pbms and. i might tell us. i don't think pbms are the at once involved. but you don't have to match. professor sood, you say pbms ought to be fiduciary. to whom? to both the plan and their

members. well, what is the plan and the member's answer is diverge two or three. fiduciary is two. ultimately, in principle they should be fiduciary to the members. okay. so for example, address make i get it. okay, i get it. mr. chairman. again, why don't we skip the foreplay and go right to the why don't we just a man bill to require that pbms have a fiduciary obligation to plan members. well i think that's been suggested and i think there's part of that in in our legislation, but probably not fully enough to satisfy you. well so let me look at what you're at. want to add to it i mean, i'm not criticizing your i don't want my office to end up in the first of i'm sure i'm not criticizing your bill. i like.

but we're just nibbling around the edges here and with respect, mr. scott. your definition of a fiduciary role, fiduciary and somebody that controls decision you know that and i know that fiduciary somebody who has who has a legal obligation to give his client. the best advice do what's best for his client. it doesn't replace with principle or vice versa. you that and i know that well you need to talk your lawyer. i may be wrong, but i doubt it. let me go back to professor sood. tell me two things you would do tomorrow to fix pbms and result in lower prices for consumers. so i think the two things i

would do area specific. yes i would implement price transparency so that everyone knows they're paying and okay, price transfer parents should just tells us who's going to screw up. yeah. and then the fiduciary responsibility says you're getting screwed. i can take you to court. so i would do those two things and are, i think better than, you know, banning particular practice is because otherwise it's whac-a-mole. you banned pricing and something else will show ready. i got 29 seconds. do you have any other suggestions? i appreciate your show. the other thing we can do is what i recommended is pass through of rebates to patients. so suppose that say that again surpassed of rebates to patients. so for example the list price a drug is $50,000 but the rebate on the drug is $40,000. so when a patient is being cost sharing, suppose percent, they

should be paying on the post rebate price. so which is the $50,000 less, the $40,000 rebate right now? what's happening? patients are being cost sharing on the $50,000. so this would immediately lower patient out-of-pocket costs. what dr. kocher said for the cancer patient. so you're saying the number, the pbms jacking up the are encouraged manufacturers to jack up the list, price so they can jack up their rebates and. that is that right? yes. and legal and the jack legal. yes i don't know about that, but i do. yeah. before go on, senator ronald, i want to remind my members got a vote and they're enforcing the 30 minute rule. so i'm going go when you take over while i'm gone and then i'll be back before you finish. i'm sure. senator hirono. thank you, mr. chairman. i thank all of the panelists for

being here. prescription drugs chain is not competitive. think that is a very clear based not just on today's testimony, but in prior hearings. one of the reasons is of vertical integration. so, professor sood, you were asked by my colleague just now what would you do? can you just explain why we shouldn't try to break up the vertical of situation, the vertical integration situation? we do we do have a bill that would require the divestiture of pbms owning pharmacies. so why wouldn't that be a structural change that we should be contemplating? so i think we can contemplate that, but i'm not sure if that change is required or how disruptive that change would be. i would encourage you, doj and

ftc to look at antitrust issues related to vertical integration and try to address them. and if that can address these issues, then we don't need to take the more heavy handed approach would be forcing pbm cms to divest pharmacies. so i'm not saying i'm i'm not just fully sold on that right now, but i'm i recognize that there are issues and and and ftc should address. well, not expecting too much along these lines from either entity, by the way, the ftc had open some, i think, investigation along the that you suggest and there are some markets that just are not given to competition. and i would say this is one of them. and i'm not blaming pbms the over the drug companies. this is not a matter whose fault it is. but there is some kinds of changes. and i would say that a vertically integrated entity you

just immediately have created a conflict situation. and so one of the ways that antitrust comes in is by requiring divest divestiture and practice in this space as a as an antitrust lawyer, i think that there are some markets, as i say, that are given to the kind of reforms that you're talking about so we can all the price transparency you want. but if you don't have much power so what so even if if the three largest pbms control 80% plus, even if they are if there's transparency in pricing if there's a lack power on the part of the entities they are working with, really the question becomes to me, so what now? i am also at a loss as why we permit spread pricing. so is false yours a pass through

pbm and why shouldn't we require all pbms to be pass through and not engage in the of super pricing that that a certain entity such as i would say the iowa ags of said that the spread pricing pbms to retain and millions and probably undue profits. so what do you say about eliminating spread pricing there are some states that have done that hawaii we support transparency and that includes transparency to what pharmacies are being paid which is why our model aligns with clients paying, what pharmacies are paid and no spread or capture in the middle that supports both pharmacy and the and the plans which should really be the gold standard support patient care professor sood.

i agree that i think you know i would support eliminating spread pricing. i don't see how it serves patients. dr. carter you have real life experience and your cancer patients and cancer treatment are i, i understand. i know from my own experience very complicated. and you have to have the medications and and the impacts of medication. you have had patients who have literally been at death's door because you're not able to get the pbms to move fast enough. and they do not have the expertise to decide which is the most efficacious. so what what is the kind of reform we need to do with prior approval by pbms. yeah, i think a good point has been made. by a lot of people in this committee of that it's it's probably not just the pbms i think there's every every line in the coming from the manufacturers you know, payer

solutions as as we saw with the inflation act an insulin but i mean i think we need to. i got lost in the question most question again prior approval oh reform prior no. i think these drugs are so expensive that we get it that you need prior approval. we need them resolved quickly and, and, you know, i that's the main thing that we're asking, not that they don't exist, but that we can resolve them quickly. i think that is a hard road to go, considering they don't really pbms don't really have the expertise. from my understanding of making these determinations quickly. thank you, mr. chairman. thank you very much, senator. mr. scott, let me start with you. you represent the largest association of pbm companies, i think is it right? yes, sir. i believe the only the the largest and only perfect. now, just help me understand. it is your business is supposed

to be doing you're supposed to be making drugs cheaper for. is that basically right? we're to help employers and plan sponsors administer benefits at a more affordable point for the consumers. okay. more affordable for consumers. that's patient. you're supposed to be making drug. would you say that succeeding we've had we've had success in managing the net cost of drugs across most categories of medications and yes in large part but we have the challenge of ever escalating drug company list prices to work against. okay. let me let me translate that for you. i think the answer you're looking for is, no, you're not succeeding at all. look, let's let's look at some data. this data shows the percentage that americans pay more than other countries for, brand name drugs. in canada, we pay 324% more than canadians pay hundred and 45% more than france and so on. on average, all together we pay. 422% more than all of these

other countries. now, either you're the worst negotiators in the history of the world, or something's wrong with your business model, which it. those. if i may, senator those are comparisons of list prices. drug companies alone as we talked about earlier, set the list price the pbm negotiating down the net cost looks at this list consume or you're not you're not actually you're not telling me that the consumers aren't paying more in the united states than they are overseas. are you? i think the data would tell us that they are exposed to a lot and then it comes to an issue benefit design. the plan decides. what your co-pay. yeah. and the benefit here's the benefit design. the design of the plan benefits insurance companies and you it does not benefit the patients patients are getting screwed. if i may we are paying two, three, four times more for drugs. people my state can't afford insulin. they can't afford the most basic drug that's when they have plans, plans that are managed by. you and you guys are getting rich off of it. i mean, absolutely filthy.

rich, the ftc's report, the government report now found that the top three pbm companies generated. point $3 billion in profits between 2017 and 2022,. $7.3 billion. that's a lot of money. why is it that nobody afford their drugs in this country but making $7.3 billion, that's more than revenue of some nations? if i may, two points. one, you're not wrong that we need more competition among drug companies. the patent reforms that you all have advanced in this committee, the we can have competition. we can leverage that to address that cost challenge. i'm glad you say need competition. don't you think the competition really need is to break up this alliance between insurance companies and pbms? those are the biggest three pbms are owned by the biggest insurance companies. you're like one huge giant pharma industry, a giant pharma

series, monopolies. right. why is it a good for the biggest pbms to be owned by biggest insurers? and now you're buying up pharmacy as well. why should we allow that? why should insurance companies, pbms also own pharmacies? so how is that good for patients? it's good for patients and for plans because it's creating optionality in the market. it's creating optionality in the state of missouri. just last year, we lost 73 independent pharmacy across my state in 19 different counties. do you know that two entire counties in the state of missouri now have wait for it? zero pharmacies, zero. now you are making $7.3 billion. you in the companies that you represent and yet to hold in the state of missouri have no pharmacies. 73 closed last why shouldn't we be breaking you guys up i mean this looks like classic monopolies. the patients are getting screwed

are getting screwed. you're getting rich. respectfully, senator you keep citing a gross revenue number of the drug deal. every dollar spent purpose. you're not making a profit. profits are in the low single digits. your profits are not better than they've ever been. i don't know on the trend over the years. yes. but you know, it is all laid out in the ftc report. you absolutely know the answer. your profits have increased and increased. increased, and now you are buying pharmacies and you are you're buying up pharmacies and you're putting independent out of business and you're doing it deliberately because you are giving special rebates and costs to the pharmacies that you own and you are directing to the pharmacies that you own such that if they don't go to pharmacy that you own, they have to pay higher. they have to pay out-of-network costs right. you're nodding your head, doctor. my god, you've lived this. right? i have lived this i live it every day. yes, it's exactly happening. so, mr. scott, why we break you guys up, can you agree? i mean, if you believe in

competition, you just said a second ago we'd be more of a competition and by golly, well, let's do it and let's up the let's let's pass a law that says pbms cannot own pharmacies. you for that. no, sir. and we've seen that competition grow in the last five years by 18% in the pbm market, by 9% in the last two years. what about u.s. pharmacy seen the number of pharma pharmacies in this country, a number of pbms, meaning it's a competitive marketplace. it's not a marketplace. the biggest three pbms own 80% of the business, 80%. and you're in turn by the biggest insurance companies. the problem, there is no competition. it's racket. it's a total racket. and the people who lose are the patients who cannot afford the prescription drugs. it's time for this congress to do something about it now. senator welch. oh, you. thank you very much. and i associate myself with the remarks from the senator from missouri. we have 126 in independent pharmacies in vermont. they've been going out of business left and right.

my view, they're absolutely to the community main is getting devastated. this is true in rural america. and jeff hochberg, who's the head of our independent pharmacy group, he's got a pharmacy in rutland and a few other places showed the dire. returns and you have the same problem mr. mcdonough that i think all independent pharmacies have. you get paid less for filling prescription in. you don't even know you're going to get a clawback from the pbm until after the fact is that true. that is true, especially as we look you they're doing true ups where from two years ago or something because of our psa but it was thousands of dollars. it is it's unbelievable. yeah. and by the way, i just want to acknowledge you. my wife first wife had cancer. the pharmacist was so crucial.

us you're getting cancer related drugs and you get the prescription and dr. kirshner, you know, this and it isn't exactly the way it it's trial and error. it should go on and the person we could talk to was our local pharmacist. god bless you all for the work that you do for all of our communities. mr. scott, i want to ask you how in the world can a business survive live if they sell the product at what is an agreed upon price and then you reimburse them at a lower price months after the fact? how in the world is that a fair business model that makes it all possible for our community pharmacies to survive just two quick holding statements and then to address your question, i don't want quick holding statements. i have a simple question. they agree on a you agree on a price and then you do a club. we all have this complicated formula. we all have the same goal. senator, we need a healthy retail pharmacy market, because if can't serve patients with those access points, what we

don't have a healthy pharmacy market and we have this they're under incredible pressure and we can be blind to it. but you're suggesting i want an answer of how we deal with mr. mcdonough and how we deal with jeff hochberg, how we deal with all these community pharmacies in our small towns throughout the country. what's those reimbursements are a part of the agreed upon contract negotiates on behalf of pharmacy. now i'm going to interrupt here professor soon. you told me that 40% now of the cost of pharmacy local drugs is in the supply chain. all right, so that's people reaching in who have access to this market by the way. the individual consumers have no to it all. they just got to get the for a person they love and they'll mortgage their house, they'll sell a retirement, they'll do whatever it takes to take care of the well-being of the person they love. so this question of demand clawback is that one of the aspects how this is getting to

be such a rip off? yes. yes. complete glee. and i agree that for a if you don't know the price you're getting for the services you provide and i don't think it's a choice for independent pharmacies, if the big three pbms control 80% of the market, they control 80% of the patients. so if don't sign a contract with the pbm, they lose 80% of the market. so i don't think there's a real choice. thank you very much. you know, it's oftentimes it's not what you do. it's how you do it. like, i think we need we need pharmaceutical to help us with drugs. but the pricing that they is terrible. we may need pbms, but how they do it makes a huge. as far i was impressed at the trans in your and the information you provide is it different than the information that the other pbms provide? our practices are different. they focus on lowest net costs

and we've never actually done our practices. you've never done that so. no, because we believe that that wasn't. you're going to i mean, it's clear happens we squeeze and crush the independent pharmacies. what about on the pricing? you share information with your members that is not shared with the people who sign up with mr. scott's organizations. the pricing for the plan sponsors is auditable and. patients get through any sort of of applications which are a pbm standard. what's the transparency you have that is different than the transparency from the mr. scott organization. we show we have all of our fees disclosed. are your fees fully? many of our members offer the same model. what many of our member companies as an association are member companies offer the same. here's the question i asked. are your fees disclosed?

could i look up your fees right now? we're a trade association, a number of individual company members. and i'm those companies, many of them structure it the same way navitas. all right, it may time is up. thank you all very much for your testimony, senator. i'm sorry. the chair. yes, thank you very much. and outright nice myself for. i want to thank all of you for being here. this is an issue that our health care marketplace has struggled with for many years. dr. mcdonough, i do want to come to you first, because in tennessee, where i since 2010, we had 120 of our pharmacies close. and this is tragic. many times. and that pharmacy is only access point for health care in these community. and to a pharmacy. they when i go in and talk with

these individuals and i'm in each of our 95 counties every year and they will talk about how horribly they were treated by the pbm. so i'd like for you just to talk about for just 30 seconds about how and consolidate and around this pbm model has strangled not only you, but other independent pharmacies. you know when we saw the chart that showed us $7.3 billion in profits that the pbm industry is making. i can guarantee you during that same time of 2017 to 2022, we saw our our profits going down. the point where we have no profits, we're being squeezed. and that's very concerning to me because when we lose that community pharmacy where there's in an urban area where they might be, the community pharmacy for that area, or when their rural area that we're in in, they ain't coming back.

i've so many mayors and city managers and in towns come to saying we open for pharmacy. i'm like, we can't, we can't afford to. so it has had dramatic impact on us to the point where now we've closed pharmacy and convert another one to a hybrid tele pharmacy and that's still struggling. and i want to make it clear, it's not because we're bad business people. i want to make that perfectly clear. it's because we are not making any money on the drug let alone the services that we provide to the patient to ensure that is achieving a therapeutic outcome with that medication. so we're losing it twice. we're losing it on the drug side and we're losing it on the service side. there's no way you're you're right about that. i want to talk about bad actors with mr. scott for few moments. we recently had the department of commerce and insurance in

tennessee do a report that us some really disturbing information on one pbm in tennessee see and what they was that they were forcing these independent pharmacies the to pay a higher or inflated rate on over 550 drugs and they profited more than million dollars through spread pricing. now gets to my first point about those 120 independent pharmacies that we have lost in tennessee. now this same pbs arm failed to reimburse 265 pharmacy claims within the legally legally set seven day business day period

and that impacted 40 separate pharmacies in the state. you know it doesn't take a lot to connect the dots on this and. there are just this. there are so many examples of, these egregious practices for, the purpose of this hearing. i've given. one finding from this and what we have seen is you talk about trends and see we don't have it and it is in some sting to patients and to pharmacies and pharmacies and to these independent pharmacies so talk to me how a $30 million split spread and delayed reimbursement for pharmacy claims meets the transparency standards. you claim the pbms are putting

in place. thank you senator blackburn i can't speak specifically to the individualized example, but i can cite to another report that was recently produced by dr. carleton from the university of chicago of looking at these questions and using the exact same dataset that's been submitted to the ftc for their ongoing study. and the conclusion was that unaffiliated pharmacies not being paid less than affiliated for. well, i will tell you, in tennessee that is not the case. and if you would like to the study, i would be more than happy. submit it to you. i will certainly take a look at it, senator, if could make two quick points. this at times expired and the practice affiliation is not unique. hospitals, wholesalers, grocery stores, amazon, others are all partnering pharmacies in order to provide that efficiency of care. and the other is this same has been made a couple of times paying, pharmacies to be able to do more services for is something that we really strongly support. there's legislation do you

support that like do you support the hike in administering fees that your pharmacies put in place? they have doubled. doubled you've got administrative fees for prescriber education, medication id here at sadhana data and lilly analytics. pardon me. and these have increased 51%, 3.8 to 5.7 billion in a two year period of time. if i had way and senator blumenthal's. thank you, mr. chairman. thank you all for being and thanks for holding hearing. i want to come back to the rebates issue. we all know that pharmacy benefit managers negotiate with drug manufacturer on rebates and theoretically they can save money for consumers if the pbms pass along the benefit of those

rebates, their clients, the employers and others. but then use the money to reduce the planned cost. there have been some debate i know and discrepancies on the issue. last summer, the three largest pbms testified in congress that 95 to 98% of the rebates they collected from drug manufacturers go back to employers. last year, the kaiser foundation and conducted a survey i think it's 2142 randomly selected companies and found that only one in five of those employers has actually received most of the rebate. the other four and five didn't know what percentage of the rebate receive or reported receiving. only some or a little bit of the rebate. i know the pbms have long argued that rebates help employers by

providing flexible witi in their benefit designs and in other ways. but if the employers aren't getting most of the rebates or don't even know what they're getting, tell me how there's merit to the pbms. mr. scott, could you. you know, there's been some discussion of it here, how you reconcile argument that the benefits go to the employers when the employers aren't getting benefits or don't know whether they're getting them. thank you for the question, senator. i believe they are getting them and they have the option to choose to get 100% of them or to use you believe they're getting them, but the kaiser foundation found, i think. i think the discrepancy we've seen in the data is that some of it is reflected of the trend that we've seen a lot more of that pass through model in the year to 18 months. and that's a that's part that more employers are saying we

want all. we've had one of the big three pbms say we're going to do only 100%. we're having kaiser foundation survey is outdated. i would need to look at it to understand i'm a supposition that that may be why it's why it's not lined with the other studies from gao from dennis carlos and what other changed in the last. employers are making a different choice. they're using their ability to design their contract to say that. they want 100% pass through and more instances and saying that has made a radical difference in whether they're getting the benefits of rebates that that choice contract for when they weren't getting benefits that that choice has always existed for them. and so we are for to make sure employers are getting the information when they're making that decision. and letting them choose whether they want to receive the rebate. what's the latest incredible study that you would urge us to. that the the completed by dr. carleton from the university of chicago which was just updated in the last month which shows

that we're almost at 100% past. i haven't that study has anyone else on that. we'd be happy to to share that with you. thank you. none of you have it. let me ask all of the witnesses on patent lies lies. you're all familiar with the drug manufacture cures, misuse of patent laws to. in retaining, in effect, monopolistic control. do all of you agree that reforms in the patent laws would enable lower costs? consumers. yes. yes, yes. hopefully we'll have unanimity. my time is about to expire. yes, i take that. we do. thank you, mr. chairman. senator byrd. thank you, mr. chairman. mr. mcdonough or dr. mcdonough as an independent pharmacist

operating in a community setting, you are not just a health care and part of that ecosystem. you're also running a small business we've seen over 6500 independent pharmacies close their doors since 2010. and in alabama looked at the reliable data between 2015 and 2018. we had over 225 closer doors. that goes to a rate of about one per month when dealing with a state like alabama. when in our rural communities local independent pharmacies is often the only health care within 20 or 30 miles. this is completely unacceptable when pbms impose retroactive clawbacks to our fees and cost reimbursement rates. they're not just squeezing your bottom. they are pushing out entire communities towards pharmacy. based on what you've seen our current pbm practices accelerating the loss of rural and what does that mean for

basic access to medications and clinical services in places like rural alabama? yeah, i would definitely say excuse me that it has been accelerating. if you look at just some of the the pass information that we've had within our own pharmacy and looking at how much we lost and i'll use the pharmacy that we just closed know two years ago we were at a negative $5,000 as our net amount that we made last year was a -75,000. then we dug into the data 25% of all the claims that we filled were than zero. unbelievable. so it's negative a. third of the prescriptions were 0 to $5. what does mean? well, if we look at cost of dispensing, you talk about being a small business. i hire people in my corporation. our corporation. we you know, 70 to 80 employees.

i take it very seriously. you know, we have to think about closing something because i'm affecting people's potential livelihoods. i've also seen how community pharmacies they close up how the community misses them because they may be the health care provider as you said that they have access to. and these are not just community. these are people who are trusted within the community, who contribute to the community. these are the people who get the calls after hours and actually take a drug to a patient at their home. that's what's missing. and we're going to be losing more and more. so long as we keep debating about this, because people have asked me, you think we will see more closures? i'm like, absolutely there is a relationship aspect in rural communities that cannot be matched when you're looking at creating opportunity, that opportunity for the american dream, you can't draw in that opportunity without access to care, without access to pharmacies.

no one is going to come and locate a plant and, create good paying jobs or decide to expand and a place that has a pharmacy desert. we know that that is true. and so looking at this, in a place like alabama, where 50, 55 to 67 of our communities are rural communities, they deserve better. and so when we're looking at all of this and i think mr. scott made clear this morning, most employers do rely on pbms to manage cost. but still as the pbm pbm debate rolls on. i'm struck by how the patient and the one who's who are actually the bills seem to the least empowered voices in the entire system. employer health care insurance remains a primary source of health coverage in america. so more than 164 million americans obtain coverage through employer. dr. sood, why do most employers a model where intermediary fees are incentivized by the size of the rebate rather than the value

of the drug to the patient. so i think the challenges employers don't have a lot of choice. 80% of the market is controlled by the big three pbms and, you know, that scale is important in in leveraging our discount pounds from from from. but i think employers would prefer a model where was a direct price reduction and no rebates because then i can make sure that i've the money. right. so are those the structural reforms that you believe are needed or else do you think is needed for more visibility bargaining power and value for dollar? so i think what is needed is greater transparency so that we know our employers can know whether they're getting a good deal or not. and and we need a fiduciary responsibility for pbm so that if they don't act in the best interest of plan members our

employees and we can address that in the courts. and one final question. dr. kocher. do you believe that rebate driven formula design and utilization tools reflect sound clinical judgment? oftentimes, no. oftentimes we are trying to fight for medications that are national guideline accepted, that we are still fighting for. thank you. for. we'll stay here to end of the meeting. but just in case something happens, want to say to all the panelists. as chairman of this committee. thank for your time and and hard work put into this. senator booker. mr. mcdonough. what happens when a person with a life threatening cannot get access to a lifesaving drug. not a good outcome? be more specific for me if there

is life threatening situation and they're not getting access to that medication, then life is at danger. and you know situations, right? i do know situations contributing to the death of an american was their inability access over time the life saving drugs that they need or because of the process of being put into place such as prior authorizations that wasn't done timely and the person stroked and. yes. so why aren't we call. this what it is. my, my, my friends across the aisle and others have called this a scam. multilevel marketing is a scam. internet. internet people that. that prey on senior citizens that scammers. this is a level of corporate violence that costing american lives. a level of colossal greed at the

expense of patient well-being. am i overstating the fact, mr. mcdonough. no. there are situations like that with every pharmacy. yeah. and so been in your state. and i sat around a table of, senior citizens who of them told me stories that they ration drugs against doctors orders, cut pills, half. what of peril does that put people in. they're not getting the medication supposed to be getting. and it's going to be again, it's to be endangering their lives, endangering their lives, because the desperate people in our country who have drugs for cancers have drugs for, heart conditions have, drugs for conditions that are threatening their lives or put in the moral. of having to make a decision that is not left to them to

ration drugs or not have them at all when they fulfill the prescription when they can't fulfill the prescription from their doctor. this is not a scam. this is a moral obscenity. and it's corporate violence. the former ftc chair, lina. under her leadership released an interim staff report that found that the biggest pbms caremark or x cvs express scripts, optimum or x, marked up numerous life saving drugs. thousands tons of percents and, many others by hundreds of percent, dispensed at their affiliated pharmacies. these drugs include treatment for cancer, hiv, multiple sclerosis, pulmonary hypertension and. shockingly, hundreds of times the cost of people just over the canadian border. they made more than $7.3 billion

in revenue from dispensing drugs. hiking up prices over the course of just six years. this of breaking up big medicine is not about dealing with awful and there are a lot of industries where corporate concentration has caused consumers to pay more. but in this case, it's not just causing consumers to pay more. it is, as your testimony has said, threatening the lives of americans americans. pbms are not the only contributor to high drug prices, but vertical integration that's allowed powerful players to buy other entities in the supply chain and steer patients drugs with higher out-of-pocket costs is causing grievous harm in the country, and it cannot be allowed to go on. according to the research of the american economic liberties project, released on march 10th, at least 326 u.s. pharmacies have closed just since 19th

2024, when congress a bipartisan pbm reform arm as part of the stopgap spending bill. we know how to solve this problem in inaction is complicity. there is nothing short an evil going on in our country that is allowing millions of american to suffer under an unjust that's hurting small people with you that have a larger focus in life not only running your business but helping communities. again, i've been your community helping people get access to drugs even when you deliver them in the middle of the night. this is wrong. this is unjust. this is violence. this is moral obscenity going on in our nation. we know the solutions this committee has got to fix that. thank you, senator, shift. thank you, mr. chairman.

and thank you for this hearing. and thank you for the work you've done to try to reform the practices of pbms. i have a long family history in this area. my grandfather, a pharmacist, my great uncle, turns 100 this week was a pharmacist. my father worked in the pharmacy growing up and of course i've had the same experience that so many of my constituents have had. doctor so thank you for coming all the way from california. let me ask you about my experience because it's left me wondering what player in scheme of things was responsible for. my experience, which was minor compared to what others have experienced, and that is i was on a medication prescribed by my physician which was working well without side effect. therefore you when you're done, will join the meeting. yes, i will. thank you very much. and i may have to cut it short to to get up in time to vote. so i was on medicine. that was work worked with no side effects. i got a letter, i think either

from my insurer or pbms. we're taking you off that medicine and putting you on a different one. and i called my physician. i said, why are we changing my medication was working perfectly well. probably someone is going to get paid more money by moving you to something and i said, well, is there an appeal. and he said, yeah, but you'll lose. and i said, well, let's appeal anyway. so we appealed. he was right. i lost. and then i said, there any other remedies we can appeal one more time, but you will lose again. we appeal one more time, molest again. so made the decision to. well, obviously wasn't my physician who made the decision that i was better off on a different medication. it was pbm and i've had a similar experience where my university changed their pbm and there's a generic medicine, you know, fda approved been in the market for 30 years well-established certainly was and covered because the change in pbm california experience of

56% increase its department of managed care and health plan spending on prescription drugs. from 2017 to 2023. how much of that do you think is because of consolidation in the industry where would you apportioned the increased cost? so i was one of the experts who, you know, back in 2017 opposed the aetna merger on vertical grounds because i thought it would reduce competition, the pharmacy market reduce competition in the insurance market and lead to higher costs. i haven't seen the study, but i agree with the general hypothesis that vertical could be responsible for higher costs. well, i wish i had more time to ask questions, but i'm likely not to make it in time to vote without adjourning. thank you all for your testimony today. this concludes our hearing. i want to thank each witness for taking the time to share experience.

written questions can be submitted for the record until may 20th. ask the witnesses to answer and return the questions to the committee as quickly as possible. this hearing is adjourned. for. another. three.