Congressman on PBMs: ‘They've essentially become extortion artists’

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Pharmacy benefit managers need reining in as federal officials on both sides of the aisle set their sights on skyrocketing costs of prescription drugs, said Rep. Greg Murphy, MD (R-North Carolina).

The issue has prompted bipartisan efforts to examine the business practices of pharmacy benefit managers (PBMs), the intermediary negotiators who bargain with pharmaceutical companies over drug prices and availability.

The Pharmacy Care Management Association, a trade organization for PBMs, sets the blame squarely on drug makers themselves for setting high prices that make affordability difficult for patients. The association argues PBM reform in Congress would hamper or eliminate a financial check on Big Pharma.

Rep. Greg Murphy, MD
_{(R-North Carolina)}

Murphy spoke with Medical Economics about why PBMs themselves also need stricter rules and more oversight, along with reforming the prior authorization process and other pending bills that could affect health care.

This transcript has been edited for length and clarity.

Medical Economics: Even this month, President Joe Biden at the White House convened a roundtable to discuss prescription drug prices. What reforms would you like to see in government to help people afford their medications? And do you support additional regulation for pharmacy benefit managers?

Rep. Greg Murphy, MD: Absolutely, I think pharmacy benefit managers, again, kind of like Medicare Advantage, started out as a good idea to try to save money, negotiate with pharmaceutical companies. But they've essentially become extortion artists, they are extorting money, getting rebates that they should be passed on to patients and are not. And there's so much of the vertical integration, these insurance companies are now doing not only primary extortion, they're doing secondary, tertiary extortion. Again, needs to be fully poured in. They have absolutely destroyed single town pharmacies or local single pharmacies and running them out of business to provide really a vertical integration that is costing America more money and making medications much more expensive.

Medical Economics: For years, physicians and patients have complained about the prior authorization process. The “Improving Seniors Timely Access to Care Act” would streamline prior authorizations. It has widespread medical support and bipartisan political support. What do you anticipate will happen in Congress for that act?

Rep. Greg Murphy, MD: Well, we sent that over to the Senate, and I think it had a very, very good bipartisan vote in the House. And as I mentioned, Democrats seem, in my opinion, and I don't mean to be political here, are seeming more to favor insurance companies, trying to push us towards a single-payer system. I've been critical of CMS (the U.S. Centers for Medicare & Medicaid Services), but here's where they got it right. They instituted some of the prior authorization reforms directly onto Medicare Advantage plans and some of the other things which, hopefully, regular insurance companies will follow.

Medical Economics: The House of Representatives and the Senate have a number of pending bills that would affect many elements in the health care system. What bills are most urgent for you or what are some that you would like to highlight?

Rep. Greg Murphy, MD: I've got several of them, good lord, we've got a bunch. Obviously, the fee schedule thing was most salient really at this moment in time it was basically at a pay for and it would, it's not even asking for a raise. It was keeping things flat. Another thing is another gimmick by insurance companies, these electronic fund transfers, that, to get your money through a HIPAA regulation, they were charging you 5 or 10% just to get your money from which they're paid. That should come out of their overhead expense. But again, they were charging people who delivered the care more money just to get their payments. That has bipartisan support. We're working on other bills to help with streamlining and getting Medicare back into some semblance of a good working structure. That's going to be a long-term goal. One of the other things is the IRA, the Inflation Reduction Act, in its effort to basically control and price fix medications did a very bad thing for the development of new medications. They made pills, basically that you're going to have your patent run out in a fairly short period of time. They did not do so with injectables. So those pills, it's great if you take a cancer pill that you can take at home rather than have to go to the hospital to get an injection. So, it's a really a bad issue by the Biden administration and pushing forward. We're trying to reverse this to make medications available to those who are not close to medical centers.