Sen. Bernie Sanders (I-Vt.) said during a Senate hearing that major PBMs promised to expand access to Ozempic and Wegovy if Novo Nordisk agrees to lower the list price. In a tense hearing on Sept. 24 held by the Senate Health, Education, Labor and Pensions Committee, Sanders, the committee chair, sought answers from Novo CEO Lars Jorgenson as to why the company’s semaglutide list prices top $1,000 a month in the U.S., noting that the drugs can cost anywhere from $130 to even $59 in other countries. Ozempic and Wegovy, both GLP-1 drugs, treat Type 2 diabetes and obesity, respectively. Sanders challenged Jorgenson to lower the U.S. list price, noting that The Cigna Group’s Express Scripts, CVS Health Corp.’s Caremark and UnitedHealth Group’s Optum Rx pledged to expand coverage of the diabetes and obesity medications. Jorgenson did not commit to a price reduction, saying “I don’t know under which conditions such a promise comes,” but he seemed to remain open to the idea if it helps patients access more affordable medicine. Jorgenson also noted that the $1,000 drug list price is a starting point for payer negotiations and said the company pays 75 cents per dollar received due to discounts, fees and rebates.

Health policy experts appear to largely agree that regardless of the partisan makeup of Congress and the White House next year, PBM reform will continue to be a key priority. Opinions are mixed, however, as to whether Democrats or Republicans would be more likely to take the hardest line against a highly scrutinized industry.

During a recent webinar hosted by Faegre Drinker Consulting, Nick Manetto, a principal at the firm, said Democrats are “maybe a hair” more likely to embrace PBM reforms that go beyond enacting new transparency requirements. PBM critics have said that while they support transparency, more data-reporting requirements aren’t enough to drive meaningful change in the industry.

Overall satisfaction with PBMs is at a decade-long low this year, according to the 2024 Pharmacy Benefit Manager Customer Satisfaction Report, published by Pharmaceutical Strategies Group, an EPIC company. The report also showed that payers were seeking improvements in the PBM industry and were willing to be part of the disruptive change.

The report is based on responses from 248 benefits leaders at employers, unions/Taft-Hartley plans, health plans, and health systems, and it was conducted from May 10, 2024, through June 7, 2024.

A recent Avalere Health analysis found that some managed Medicaid insurers have stricter policies for cell and gene therapies than fee-for-service Medicaid programs, even though the authors cited a federal regulation that “requires MCO coverage policies to be no more restrictive than FFS policies.” Despite that regulation, Margaret Scott, an Avalere principal and report co-author, says it is “a little bit of a gray area” whether MCOs need to abide by that mandate.

“That really isn’t defined very well either in regulation or in any guidance from CMS,” Scott tells AIS Health, a division of MMIT. “We also see that a lot of states don’t actually review the clinical coverage criteria that are used by their MCOs. It may not come to a state’s attention that a particular MCO may have stricter coverage criteria unless they receive a complaint from a beneficiary.”

When the Federal Trade Commission (FTC) officially accused the three largest PBMs of artificially inflating insulin prices, it marked the latest move in what has become a protracted effort by federal regulators to rein in the industry’s business practices.

However, experts who spoke to AIS Health say it’s unclear how much of an impact the FTC-driven litigation will have on the market — or whether the complaint itself will survive once the White House gains a new occupant.

Even if the FTC’s lawsuit is “robustly successful,” says Joe Shields, managing director of Transparency-Rx, it is focused on only one drug category. “That’s not meant as a criticism, but the reality is, what that means to the broader aspects of formulary or pharmacy benefit management, it’s an open-ended question,” adds Shields, whose organization of smaller PBMs is pushing for industry reform.

Employers and health plans are less satisfied with the “Big Three” PBMs — CVS Health Corp.’s Caremark, UnitedHealth Group’s Optum Rx and The Cigna Group’s Express Scripts — compared with their smaller peers in the pharmacy benefits industry, according to a Pharmaceutical Strategies Group (PSG) survey published this month. While the Big Three have taken steps in recent months to offer more transparent models, Michael Lonergan, PSG’s president, tells AIS Health those companies have faced numerous challenges to their businesses that have made them more unpopular among clients.

For instance, he mentions the Federal Trade Commission (FTC) lawsuit filed on Sept. 20 against the Big Three PBMs and their affiliated group purchasing organizations (GPOs), accusing them of inflating the list price of insulin medications and restricting access to those drugs. The FTC also issued an interim report in July that was highly critical of the Big Three, which together account for about 80% of the U.S. prescription drug claim processing market.

The Food and Drug Administration’s top gene therapy regulator issued what he acknowledged is a “provocative” call to consider setting a “target product profile” for gene therapy that includes not just what is expected from a clinical perspective, but “what we need to expect out of them from an economic perspective and from a clinical benefit perspective versus cost perspective.”

The FDA, by virtue of legal mandates and historical precedent, tends to avoid discussing the costs of novel medical interventions. But when a senior leader like Center for Biologics Evaluation and Research Director Peter Marks discusses cost-effectiveness tradeoffs, eyebrows raise.

After the chairman of a key House committee accused three top PBM executives of giving “fraudulent testimony,” one of those companies is hitting back. The heads of CVS Health Corp.’s Caremark, The Cigna Group’s Express Scripts and UnitedHealth’s Optum Rx testified before the House Committee on Oversight and Accountability on July 23 to defend their companies against skeptical lawmakers. In late August, committee Chairman James Comer (R-Ky.) sent letters to CVS’s David Joyner, Express Scripts’ Adam Kautzner and Optum Rx’s Patrick Conway, M.D., offering them an opportunity to “correct the record” regarding statements they made, such as Joyner’s assertion that Caremark pays CVS-affiliated pharmacies less than other pharmacies in its network. In a Sept. 10 letter, Caremark responded by asserting that Joyner’s testimony was “accurate and supported by comprehensive analyses of CVS Caremark’s data by an outside economist.”

UnitedHealth Group’s Optum Rx, The Cigna Group’s Express Scripts, CVS Health Corp.’s Caremark and Prime Therapeutics together control about 70% of the national PBM market in 2022, according to an American Medical Association (AMA) report released on Sept. 9.

Although the PBM industry’s trade group immediately criticized the report, pointing out that the nation’s largest physician trade group could be biased against PBMs, data from AIS Health’s parent company, MMIT, tells a similar story. And one leading health policy expert tells AIS Health that what the researchers found is “very reasonable” and consistent with other reports on the concentration and vertical integration in the PBM market.

In recent years, commercial health plans have increasingly opted to place both biosimilars and their reference biologics on preferred tiers in their formularies, according to a recent Health Affairs study.

The researchers analyzed coverage and market share for seven biologics — also known as “originator products” — and 20 corresponding biosimilars from the Tufts Medical Center Specialty Drug Evidence and Coverage Database and the IQVIA Longitudinal Access and Adjudicated Data Set from August 2017 to August 2022.