Members of Congress last week took up an issue potentially of great importance: What to do about powerful health conglomerates who play an increasingly powerful role in the drug-supply chain.

But the event also demonstrated the harsh partisanship that increasingly paralyzes Congress in the face of difficult problems.

Rep. James Comer, R-Ky, called the forum to take testimony on pharmacy benefit managers: drug middlemen who negotiate rebates from drugmakers, create networks of pharmacies and determine reimbursements to those pharmacies.

It might seem obvious that if your drugs are expensive, the people making them must be to blame. But the supply chain is dizzyingly complex and obscure players like wholesalers, “pharmacy-services-administration organizations,” pharmacies and others have roles in determining the cost of medicine. 

“PBM’s haven’t only consolidated horizontally, they’ve also done so vertically. … This means that when PBMs negotiate with a pharmacy or a health insurer, they are either negotiating with themselves or one of their direct competitors.” — Congressman James Comer

But an analysis earlier this year showed that pharmacy benefit managers, or PBMs, and drugmakers probably play the biggest role in a marketplace that appears not to be functioning well. 

The analysis showed how 11 generic versions of Truvada, an HIV suppressant that prevents infection, flooded onto the market in March 2020 and list prices went up. That’s a pretty warped outcome, given that generic competition is supposed to bring prices down.

Drugmakers and PBMs together control the hazy system of rebates that raises list prices, but there are several reasons to suspect that PBMs have the most leverage.

For starters, the three biggest — CVS Caremark, OptumRx and Express Scripts — are estimated to control well over 70% of the PBM marketplace. That’s far greater dominance than any three drugmakers have in their sector.

In addition, each of the PBMs owns or is owned by a major insurer and each owns some kind of pharmacy while simultaneously determining reimbursements to its competitors. The conglomerates owning the sprawling health businesses all are among the 13 largest corporations by revenue in the United States.

In the forum he held last week, Rep. Comer said the corporate concentration has been bad for competition.

Antonio Ciaccia, a former lobbyist for Ohio community pharmacies, says PBMs feast on a lack of transparency.

“PBM’s haven’t only consolidated horizontally, they’ve also done so vertically,” he said. “As of today, every major PBM owns or is owned by a major health insurer. Furthermore, every major PBM owns or is owned by a specialty mail-order or retail pharmacy or all three. This means that when PBMs negotiate with a pharmacy or a health insurer, they are either negotiating with themselves or one of their direct competitors.”

Comer added that the situation has “allowed PBMs to grow exponentially and snuff out their competition.”

The congressman called a group of expert witnesses to support his point.

“Historically (PBMs) were independent from insurance companies and added value by negotiating better prices by encouraging uptake of generics and encouraging mail-order services,” said Erin Trish, co-director of the University of Southern California’s Schaeffer Center for Health Policy & Economics. “However, a wave of consolidation in the last few years, including consolidation with insurers buying up PBMs and other activities, have distorted PBM behavior. As a result, patients are being left behind.”

Testifying on behalf of the Pharmaceutical Care Management Association, a PBM industry group, Kim Caldwell defended the companies, saying they weren’t responsible for price increases.

“Much like hospitals, universities, large research organizations and even Congress, PBMs are entities which are staffed by bright, caring and creative individuals who take their jobs and responsibilities seriously and who earnestly want the best outcome for patients, beneficiaries and the health care system,” he said.

But others on the panel weren’t buying it. Antonio Ciaccia, a former lobbyist for Ohio community pharmacies who now runs firms that study drug pricing, said PBMs feast on a lack of transparency.

“With mystery there’s margin and there’s a lot of mystery,” he said, adding, “The bad news for you all is that these prescription drug overcharges are not unique to Ohio, not unique to Medicaid, and all the pumped-up drug prices are being matched with federal taxpayer dollars.”

And Ted Okon, executive director of the Community Oncology Alliance, said that the companies that own PBMs are using their dominance to limit cancer patients’ choices. 

“With their near-stranglehold on medicine, these companies can dictate what cancer care these oncologists can prescribe and how and where cancer patients receive treatment,” He said. “Especially in the case of oral cancer drugs, they dictate that patients obtain their drugs via the PBMs’ mail-order pharmacies rather than at the point of care from their provider. Not only does it disjoin and un-coordinate the patient’s care, but it leads to delays, denials and waste.”

Comer, the ranking Republican on the House Oversight and Reform Committee, agreed with the critics’ claims. But he said he couldn’t get Chairwoman Carolyn Maloney, D-N.Y, to take an interest.

That’s why Comer and other Republicans on the committee called the forum, he said, while making a number of harshly partisan declarations.

 “Democrats have given a free pass to pharmacy benefit managers even though they play an outsized role in driving rebates and list prices of prescription drugs,” Comer said. “Despite my request to Chairwoman Maloney to hold a hearing to examine the role of PBMs, Democrats have decided to limit their drug-pricing investigation only to pharmaceutical companies, leaving a significant void in the Oversight Committee’s review of drug pricing and many unanswered questions.”

Progress on the issue might be destined to fall victim to partisan paralysis. Maloney’s office didn’t respond to a request for comment.