Last week, the Senate Commerce Committee held a hearing on legislation being pushed by Sen. Maria Cantwell that would subject pharmacy benefit managers (PBMs)—who negotiate discounted drug prices for participants in health insurance plans—to additional scrutiny from the Federal Trade Commission (FTC).
While the Committee is Cantwell’s to chair, and the legislation being examined is hers, Cantwell nonetheless managed to beclown herself by showing an embarrassing lack of knowledge of who PBMs are, and more importantly, who owns them.
Cantwell notably said, “If you buy in bulk, yes, you should get a discount. The question here is who is getting the discount? Is the consumer getting the discount or are the very manufacturers who own the PBMs getting the discount and pocketing it?”
Despite chairing this committee and having written the legislation in question, Cantwell appears to be unaware of the fact that pharmaceutical manufacturers do not own any of the major PBMs that would be affected by the bill. As Healthcare Dive noted last year when reporting into an existing FTC inquiry regarding PBMs, “The three biggest PBMs — CVS Caremark, Express Scripts and OptumRx — control nearly 80% of the prescription drug market, and are owned by CVS (which owns payer Aetna), Cigna and UnitedHealth (which operates payer UnitedHealthcare), respectively.”
Confusing insurance companies for pharmaceutical manufacturers is quite the mistake. Was this a case of bad staff work, or was Cantwell having an (almost-) senior moment?
Also of note: Last week, the sole remaining Republican FTC Commissioner announced her resignation in protest at the activism and overall bad conduct of the agency under the leadership of Chairwoman Lina Khan. Cantwell may have chosen an interesting time to try to grant that agency more responsibility and power, as opposed to holding back; it’s not clear the agency can cope with more on its plate, or that it will handle additional work in a way that actually means cost savings for consumers, a point made by at least one witness at the hearing.
[Image credit: AP]