PBM executives face penalties if their testimony goes uncorrected 

Photo: Terry Vine/Getty Images

The heads of three large pharmacy benefit managers have until tomorrow to respond to a House Committee or face perjury charges that could result in fines or even prison time, according to the letters sent by House Committee on Oversight and Accountability Chairman James Comer (R-Ky.)

On August 28, Comer sent letters to the CEO and presidents of three major pharmacy benefit managers – CVS Caremark, Express Scripts and Optum Rx – asking them to correct the record on statements they made during their appearances before the committee at the July 23 hearing, "The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part III: Transparency and Accountability."

Specifically, Comer wants the PBM executives to correct statements they made saying their companies do not steer patients to their PBM-owned pharmacies.

Comer gave a deadline of Wednesday, September 11, for the executives to respond.

Comer cited legal code on perjury that includes penalties of fines, imprisonment or both.

Letters were sent to David Joyner, president of CVS Caremark; Adam Kautzner, PharmD, president of Express Scripts; and Dr. Patrick Conway, CEO of Optum Rx. They represent the country's largest PBMs. UnitedHealth Group's OptumRx, Cigna's Express Scripts and CVS Health's CVS Caremark account for an estimated 80% of prescriptions. 

An Express Scripts spokesperson said, "We stand firmly behind Dr. Kautzner's testimony and strongly refute and disagree with this letter's allegations. We are proud of the work our clinicians and teams do every day to improve health and lower the cost of medications for the millions of Americans we serve." 

CVS Caremark and Optum Rx did not respond to requests for comment.

WHY THIS MATTERS

The PBM executives made statements that contradict the committee's and the Federal Trade Commission's findings about the PBMs' self-benefitting practices that jeopardize patient care, undermine local pharmacies and raise prescription drug prices, Comer said.

"The chief executives for CVS Caremark, Express Scripts, and Optum Rx claimed they do not steer patients to PBM-owned pharmacies," the letter said. "The executives also made claims contradicting the Committee's and FTC's findings regarding contract negotiations, contract opt outs, and payments to pharmacies." 

Findings from committee's and the Federal Trade Commission show that CVS Caremark, Express Scripts and Optum Rx, reimburse PBM-owned pharmacies at a higher rate than nonaffiliated pharmacies, the letter said.

PBMs accomplish patient steerage in different ways, including pharmacy network and formulary design, according to Comer. For example, the FTC reports that "PBMs routinely create narrow and preferred pharmacy networks that can advantage their own pharmacies while excluding rivals," according to the letter.

THE LARGER TREND

Federal scrutiny of PBMs has increased.

In July, The Wall Street Journal reported that the Federal Trade Commission was preparing to sue the largest three pharmacy benefit managers over their negotiations over the prices for drugs including insulin. The proposed lawsuits relate to rebates brokered with drug manufacturers.

This was after the FTC released a report based on a two-year investigation into PBM practices called, "Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies."

Asked on Monday if a lawsuit had been filed, or if it still intended to file one, the FTC responded that it had no comment.

Last November, the Senate Finance Committee unanimously passed a comprehensive draft package for more transparency and regulation of PBMs. The Better Mental Health Care, Lower-Cost Drugs, and Extenders Act was expected to be paired with provisions in the Modernizing and Ensuring PBM Accountability Act (MEPA), which was introduced in the Senate in December 2023.

There are currently 326 PBM reform bills, both at the federal and state level, according to the National Community Pharmacists Association.

The Government Accountability Office in April released a report on state regulation of PBMs.

Email the writer: SMorse@himss.org