Health Care & Prescription Drugs News

WASHINGTON, Feb. 23 – "Drug plans like CVS-Caremark, Express Scripts, and Medco, called ‘pharmacy benefit managers,’ could be scamming your family. But under current law, they'd get away with it, and taxpayers would foot the bill."

That's the message Health Care Advocate Larry McNeely of the U.S. Public Interest Research Group delivered before a Congressional panel on Tuesday. (Click here for PDF of testimony.)

McNeely joined other consumer advocates at the hearing of the House of Representatives Oversight and Government Reform Committee Federal Employees Subcommittee to support a proposed legislation (H.R. 4489) that would crack down on abuses by CVS-Caremark and other pharmacy benefit managers (PBMs) within the Federal Employees Health Benefits Program. The program covers millions of federal employees, retirees and their families.

According to McNeely's testimony, cracking down on the PBM industry has already yielded hundreds of millions in savings for state and local governments.

"The state of New Jersey alone will save $558 million by requiring that the PBM for its employees comes clean. It's time the federal government did the same,” McNeely said following the hearing.

PBMs are hired by health plans to negotiate the best deals on prescription drugs.  But according to McNeely, "Too often, they aren't looking out for consumers or patients.  Instead, they are using shady deals and kickbacks to pad their bottom line."

In the case of the Federal Employee Health Benefits Program the result is higher costs for federal taxpayers, since they are the ones who foot the bill, McNeely noted.

The solution advanced by the proposed H.R. 4489, introduced by Subcommittee Chairman Rep. Stephen Lynch (D-MA), is to ban conflicts of interests and make transparent the deals that PBMs strike with retail outlets and manufacturers.

McNeely praised the proposed legislation for providing the "tools necessary to reduce drug costs and prevent anti-consumer conduct in this major federal program. Sunlight is the best disinfectant."

The bill has also been endorsed by the Change to Win Federation, National Treasury Employees Union, National Community Pharmacists Association and the National Legislative Association on Prescription Drug Prices (NLARx).

“Passing this legislation would a good start towards reining in unfair market practices of these massive pharmacy benefit managers,” McNeely added.

Download a PDF of the testimony here.

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U.S. PIRG, the federation of state Public Interest Research Groups, is a non-profit, non-partisan public interest advocacy organization. For more information visit http://www.uspirg.org.
For more on U.S. PIRG’s Making Health Care Work campaign, click here.
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