US lobbyists pour cash into the drug prices blame game

• Pharmacy benefit managers said to drive up prices and enrich themselves

As US pharmacy benefit firms face scrutiny from legislators and regulators, the main group representing them in Washington nearly doubled its lobbying spend to more than $15m in 2023, a Reuters review of congressional disclosures shows.

That is second only to the $27m spent by the Pharmaceutical Research and Manufacturers of America (PhRMA), the usual number one and main lobby group for drugmakers that have tried to deflect criticism of high drug prices by blaming the industry’s middlemen, the pharmacy benefit managers (PBMs).

The $15m spent by the PBM lobby group, Pharmaceutical Care Management Association (PCMA), dwarfs the $8.6m it spent in 2022 and $7.8m in 2021. The 2023 figures, which were revealed after fourthquarter lobbying disclosure forms were released this week, have not yet been reported. Legislators and the Federal Trade Commission (FTC) have been investigating the role of PBMs in rising healthcare costs. Several proposed bills would require them to make their business dealings public, including the fees they earn on transactions.

“In recent years, policymakers have come to realise that PBMs deserve some of the blame for high drug prices,” said Larry Levitt, vice-president for health policy at KFF. “It’s not surprising that PBMs would be ramping up their lobbying to try to fend off efforts to regulate them more strictly.”

PBMs negotiate payments for prescription medicines with drugmakers on behalf of clients — primarily employers and health insurers — and decide which to include on their lists of covered drugs.

Critics say PBMs have driven up prices and enriched themselves rather than negotiate for lower ones. PBMs deny those accusations and say they play an important role in holding down drug costs for their clients, and that most after-market discounts go to their customers.

PCMA, which represents top PBMs such as CVS Health’s Caremark, Cigna Group’s ExpressScripts, UnitedHealth Group’s OptumRX, Prime Therapeutics, and Humana, spent more than $5m in the last quarter alone.

A PCMA spokesperson said it is imperative to educate lawmakers and the public on the role of PBMs in lowering prescription drug costs.

PhRMA in the past year has launched several television and internet ads blaming “pharmacy middlemen” for high drug prices.

“In Washington and nationwide, Big Pharma continues its extraordinarily high advertising spending to blame-game others for high drug costs,” the PCMA spokesperson said.

“The more people look under the hood at the broken PBM model, the clearer it is that the system needs to be fixed,” said PhRMA spokesperson Nick McGee.

“There’s a growing bipartisan chorus of regulators, policymakers, patients, providers, pharmacists, smaller PBMs and others across the country calling for action,” he said. KFF’s Levitt agreed that while PhRMA plays a big role in driving scrutiny over PBMs, it is not alone. Democrats and Republicans are digging into its practices and employers are asking for more transparency on their dealings, he said.

“The passage of the inflation reduction (act) paved the way for more of a bipartisan effort to scrutinise PBMs more closely.”

PhRMA retained the top spot for lobbying spending in its industry it has held since 2001, and was among the overall top five spenders nationwide. Its $27m in 2023 was used to try to curry favour on various issues including the implementation of the first drug price negotiation programme in the government’s Medicare health plan for older people under the Inflation Reduction Act.

Negotiations started in 2024 for prices will not take effect until 2026.

The Biotechnology Innovation Organization (BIO) fell from second place to seventh, its disclosures showed, as it saw a swathe of exits in 2023, most recently by Pfizer, which is also represented by PhRMA.

BIO declined to comment on its lobbying expenditures. A spokesperson said their numbers vary every year and are not based on a single issue. BIO spent $12m to $13m a year from 2019-2022.

IT IS NOT SURPRISING THAT PBMS WOULD BE RAMPING UP THEIR LOBBYING TO TRY TO FEND OFF EFFORTS TO REGULATE THEM MORE STRICTLY

THE MORE PEOPLE LOOK UNDER THE HOOD AT THE BROKEN PBM MODEL, THE CLEARER IT IS THAT THE SYSTEM NEEDS TO BE FIXED