On Wednesday, the congressional Joint Economic Committee (JEC) held a hearing entitled, "Stop Paying More for Less: Realigning Healthcare Incentives to Improve Outcomes and Reduce Costs." Witnesses included Matthew Fiedler, senior fellow at the Brookings Institution Center on Health Policy; Brooks Tingle, CEO of John Hancock Financial; Avik Roy, co-founder and chairman of the Foundation for Research on Equal Opportunity; and Ed Clarke, vice president and chief medical officer of the insurance division at Banner Health.
The JEC is distinct from other congressional committees in that it includes members from both the House and the Senate and presides over informational hearings and generates annual economic reports, rather than originating legislation like other congressional committees.
NCPA submitted a statement for the record for this hearing, urging the JEC to focus on the role of PBMs in increasing health care costs.
While the Affordable Care Act featured most prominently in the hearing, Rep. Nicole Malliotakis (R-N.Y.) pressed witnesses on PBMs' role in increasing health care costs while worsening outcomes.
"We also need to rein in these insurance companies, insurance brokers, and predatory PBMs if we really want to drive down costs. So, our legislation is a short-term solution, but we're here today because we want to pick your brains about what we can do to really fix this issue overall ... I'm very interested in [vertically integrated insurers with medical practices] in the pharmaceutical space.
“They're crowding out independent providers and limiting patient choices. Insurer-owned PBMs have also driven up drug prices, reducing competition and increasing costs on consumers," she said. Malliotakis asked Fiedler what steps Congress should take to crack down on PBMs to lower drug costs and increase transparency, both for patients and independent pharmacies.
Fiedler pointed the finger at market consolidation, replying that, "I think one of the fundamental challenges we have in the PBM space is that there's just not very much competition ... three PBMs control a very large fraction of the market, and that allows them to extract a large, large payment for their services. I do think there are opportunities, particularly on the payer side, from a transparency perspective, of helping employers better understand the terms of the contracts they're signing and hopefully finding ways to sort of get a better deal on behalf of their employees."
You can watch the whole hearing here.
