The Council for Citizens Against Government Waste (CCAGW) is targeting U.S. Sens. Tommy Tuberville (R-Auburn) and Katie Britt (R-Montgomery), launching a campaign against attempts to regulate aspects of the pharmaceutical industry.
CCAGW President Tom Schatz recently appeared on Mobile radio FM Talk 106.5's "The Jeff Poor Show," where he discussed the campaign and the efforts of U.S. Sen. Bernie Sanders (I-Vt.) to further regulate the practice of Pharmacy Benefit Managers (PBMs).
According to Schatz, the issue stems from Senate Bill 1339 (S1339), sponsored by Sanders, to provide for increased oversight of entities that provide pharmacy benefit management services on behalf of group health plans and health insurance coverage.
The bill is part of the more comprehensive healthcare package the Senate anticipates taking up this month.
PBMs operate as intermediaries between drug manufacturers and insurance companies by negotiating rebates and discounts, processing claims, reviewing drug utilization and much more. PBMs are generally understood to reduce the cost of prescription medication. However, critics claim PBMs cut down on choices for consumers and that PBM savings never reach the customer's pocket.
"S1339 is to interfere with a very successful part of the healthcare system, known as pharmacy benefit managers, essentially negotiators that, on a large scale, help reduce the cost of pharmacy benefits for 275 million Americans," Schatz said. "Saving them an average of $1,040 every year by reducing the cost of the pharmaceuticals that they get at their pharmacies using mail order rebates [and] lots of ways that they save money. They've been doing this since the 1960s. They get more people in every year. And it's a completely voluntary arrangement by the business, you know, unions, state and local government; they decide on their own to do this. And almost 80% of the country is covered. Clearly, it is something that people want, and they see is helping to save money."
Tuberville was critical of PBMs in a 2021 op-ed in the Washington Times.
"PBMs claim they help patients by negotiating lower prices from drug manufacturers," Tuberville said in his op-ed. "But the fact is PBMs rarely, if ever, pass those savings on to patients. More often, PBMs use their bargaining power to bring the cost of a drug down but pocket the difference for themselves. The PBMs get richer, while patients get squeezed."
An ad by CCAGW opposing S1339, obtained by Fox Digital, reportedly featured a voice-over encouraging citizens to call Britt's office and ask her to oppose the bill.
Britt has not spoken publicly about PBMs. However, the Business Council of Alabama (BCA) openly opposed the state legislature's attempt to regulate PBMs in May 2021 while Britt was still BCA president. The legislation eventually passed, a decision praised by Tuberville. Britt stepped down in June 2021 to pursue her now-obtained Senate seat.
"[Sanders] thinks that by interfering with these private agreements, he is going to lower prices," Schatz asserted. "He thinks that by controlling the prices of drugs and the amount of research that would come out of that –which, of course, means less research when you cap the price of drugs– would also save money, quote unquote. Importing from other countries would save money. Every idea that he has is intended to get more control by the federal government over your healthcare choices."
He continued, "Price controls don't work. It's especially unfortunate and damaging when it comes to benefits in the healthcare system, whether it's at the pharmacy or whether it's the research and development of new drugs. And that's [Sanders'] objective, is socialized healthcare."
CCAGW's concern with S1339 stems from a belief that restricting the actions of PBMs to lower prices for the consumer will ultimately lead to higher healthcare costs and less research and development on pharmaceuticals.
"The government accountability office has found that [PBMs] save money for Medicare part B beneficiaries, that was 2019, not that long ago," Schatz said. "The Federal Trade Commission [in] 2005 found that prices were generally lower at the PBM-owned mail-order pharmacies than at independent mail-order and retail pharmacies. So again and again, when this has been examined, there are savings. Why, again, would anyone voluntarily enter into an agreement with a [PBM] to help people who work for them save money if it didn't work?"
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