- Independent Vermont Sen. Bernie Sanders proposed legislation that seeks to regulate Policy Benefit Managers (PBMs), and is splitting support among some Senate Republicans.
- The Council for Citizens Against Government Waste (CCAGW), the lobbying arm of a conservative watchdog group, has launched a multimillion-dollar campaign against Sanders’ legislation, targeting several Republicans in the upper chamber.
- “We’re not sure why any Republican would support anything Bernie Sanders touts relating to health care,” CCAGW President Tom Schartz told the Daily Caller News Foundation.
Some Senate Republicans are divided over legislation proposed by independent Sen. Bernie Sanders regulating the middlemen that negotiate drug prices and health care benefits.
Sanders’ legislation to reform Pharmacy Benefit Managers (PBMs), who are responsible for negotiating drug prices and health care benefits for consumers, seeks multiple regulations the middlemen must abide by, like reporting to insurance plan providers about services provided and prescription pricing. Some in the upper chamber’s GOP are supportive of PBM reform to cut prescription drug prices and provide transparency, while others, including a conservative watchdog group, argue it is an example of government interference in the health care system.
“Patients and employers are overpaying for prescription drugs which, by the way, also costs taxpayers money. Transparency is the best way to fix the problem. The PBM Reform Act provides this transparency,” Republican Sen. Bill Cassidy of Louisiana, a cosponsor of Sanders’ legislation, told the Daily Caller News Foundation in a statement. “The only reason anyone could want patients, employers and taxpayers to pay more is if they were the one profiting.”
Along with Cassidy, the ranking member of the Senate Committee on Health, Education, Labor and Pensions (HELP), the Pharmacy Benefit Managers Reform Act is also cosponsored by Republican Sens. Roger Marshall of Kansas and Mike Braun of Indiana.
The HELP Committee, chaired by Sanders, voted on the legislation May 11 where it passed largely with bipartisan support. Only three members voted against it — Republican Sens. Rand Paul of Kentucky, Mitt Romney of Utah and Tommy Tuberville of Alabama.
The Council for Citizens Against Government Waste (CCAGW), the lobbying arm of conservative watchdog group Citizens Against Government Waste (CAGW), has launched a multimillion dollar campaign push against Sanders’ legislation, hoping to unite Senate Republicans behind the effort.
“There is now a serious effort in the Senate in particular to pass legislation that would start restricting how PBMs operate, which would have an impact on the savings of more than $1,000 per year for people that get benefits from PBMs. And it also is, as Sen. Sanders himself said, a step toward government-run health care,” CCAGW President Tom Schartz told the DCNF. “We’re not sure why any Republican would support anything Bernie Sanders touts relating to health care.”
Tuberville has previously expressed support for regulating PBMs in a 2021 op-ed for The Washington Times, but a spokesperson for the senator told the DCNF he has some qualms about Sanders’ legislation.
“Coach voted against the bill in committee because he shared a lot of those same concerns,” Tuberville spokesperson Steven Stafford told the DCNF. “What the bill looks like when it comes to the floor is still not clear.”
Conversely, Marshall’s office touted his work in the Senate to regulate PBMs and find “conservative health care solutions,” and told the DCNF the senator disagrees with CCAGW’s characterization of the reform fight.
“Doctor Marshall has always respected CCAGW and is proud of the 96 rating he received from them last year for his conservative voting record. However, he also respectfully disagrees with their description of the bill and the campaign against it,” Marshall’s office said. “This bipartisan bill will demand transparency from a health care industry player that is pocketing massive amounts of money that should be utilized to lower the cost of drugs for Kansans.”
Similar PBM reform legislation has been proposed in the House, as well as another bill in the upper chamber cosponsored by Iowa Republican Sen. Chuck Grassley and Washington Democratic Sen. Maria Cantwell.
CCAGW is running advertisements targeting several conservatives in the Senate, like Braun and Tuberville, as well as Republican Sens. Josh Hawley of Missouri, Katie Britt of Alabama and Cindy Hyde-Smith of Mississippi, a source familiar with the campaign confirmed to the DCNF.
“I believe in conservative health care solutions that strengthen the marketplace, increase competition, raise the quality of care, and lower costs for hardworking American families,” Britt told the DCNF in a statement.
“Josh is standing up for patients and working to put an end to the sweetheart deals between insurance companies and Big Pharma. Of course, their lobbyists are coming after him, they want to keep the gravy train rolling,” Abigail Jackson, spokeswoman for Hawley, told the DCNF of CCAGW’s campaign.
Charity transparency reports indicate that CAGW has received financial contributions from Johnson & Johnson, as well as the Bradley Foundation and ExxonMobil, according to Fox News.
The Department of Justice launched a federal probe into Johnson & Johnson in 2016 to investigate its relationship with PBMs, according to Fierce Pharma. Several PBMs, like CVS Caremark, Express Scripts, Humana, MedImpact Healthcare Systems, Optum Rx and Prime Therapeutics, faced similar probes by the Federal Trade Commission (FTC) last year.
Senators like Paul, Romney and Ted Cruz have expressed concern over regulating PBMs, which Schartz commended them for.
“Different parts of the Republican caucus are all looking at this and saying, having a government make decisions about what should or should not be part of how the Pharmacy Benefit Managers operate, is something that they oppose, and they want to remind their colleagues, their fellow Republicans, that it’s just not a good idea to start regulating how they work,” said Schartz.
Paul wrote an op-ed in late July for Jobe Publishing, Inc. about PBMs and the pending legislation, which was forwarded to the DCNF upon request for comment.
“Instead of lowering drug prices, this bill likely will put more money in the pockets of the big pharma CEOs,” Paul wrote. “The bill would put more regulations on pharmacy benefit managers (PBMs) and ban some of their contracts altogether.”
Romney voiced his concern over Sanders’ legislation in remarks his office pointed the DCNF toward, and offered an amendment to strengthen employers’ rights when making pharmacy benefit decisions.
“My amendment would preserve the option for employers to consider spread price contracts but would require PBMs to also present a plan sponsor with at least one non-spread price contract,” Romney said. “A vast majority of small and middle sized employers prefer spread price contracting because it’s lower cost and more certainty for them. That’s why they choose it. Making that illegal is not going to help small or mid-sized businesses.”
Cruz, ranking member of the Committee on Commerce, Science and Transportation, also expressed concern over PBM reform in a mid-February hearing. The senator warned about the dangers of granting the FTC regulatory power against PBMs.
PMBs vouch for the lowest possible drug prices for prescriptions from retail pharmacies, but benefit from higher prices at their in-house pharmacies, according to The Wall Street Journal.
“The incentive is there for the PBMs and the specialty pharmacies to keep prices as high as possible,” Shannon Ambrose, co-founder of Archimedes, a competitor of PBMs, told the WSJ.
When asked about this discrepancy, Schartz said the issue isn’t applicable to any of the legislation currently considered in either chamber of the Legislature.
“Since PBMs save more than $1,000 annually for consumers and they are growing in popularity every year, their in-network pharmacies, which benefit from their negotiated pricing, are part of why those savings are available,” said Schartz.
CCAGW expected Sanders’ legislation to be taken up before the August recess, but as the main focus in the legislature is the current spending fight, it’s unclear when the next action might be.
Neither Senate Majority Leader Chuck Schumer nor Minority Leader Mitch McConnell responded to the DCNF’s requests for comment. Sens. Sanders, Braun, Cindy Hyde-Smith and Cruz also did not respond to requests for comment.
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