The leaders of Caremark, Optum Rx and Express Scripts had until Wednesday to walk back statements they made in July — or face potential legal action.
Dive Reporter: Rebecca Pifer, Senior Reporter
Dive Brief:
Top executives at major pharmacy benefit managers are standing behind recent testimony on the Hill that put them in hot water with the chair of the powerful House Oversight Committee.
Chair James Comer, R-Ky., accused Patrick Conway, the CEO of UnitedHealth’s Optum Rx; Adam Kautzner, the president of Cigna’s Express Scripts; and David Joyner, the president of CVS’ Caremark, of lying during a July hearing, and gave them until Wednesday to correct their statements or face potential fines or jail time.
Optum Rx, Caremark and Express Scripts have responded to Comer and declined to change any testimony, the companies confirmed. The House Oversight Committee is “reviewing the PBMs’ written responses as well as the additional documents and information they provided,” according to a spokesperson.
Dive Insight:
During the House Oversight hearing earlier this summer, Conway, Kautzner and Joyner defended PBM business practices in front of a generally unfriendly panel of lawmakers.
PBMs, middlemen that sit in between drugmakers, payers and pharmacies in the drug supply chain, have found themselves at the center of public fingerpointing over what entities are to blame for the increasingly unaffordable cost of medications in the U.S.
During the hearing, lawmakers on both sides of the aisle pressed the executives on how Caremark, Express Scripts and Optum Rx, which jointly control about 80% of prescriptions in the country, use their size and reach to extract profits from the pharmaceutical supply chain.
Along with raising concerns about rampant vertical integration, lawmakers slammed the companies for giving preferential treatment to owned pharmacies at the expense of independent businesses and favoring more expensive brand-name drugs on their formularies, or lists of covered drugs, in exchange for higher rebates.
The executives denied that their rebating practices raise drug costs, and testified that their PBMs treat affiliated and unaffiliated pharmacies equally when setting rates, negotiating contracts and telling patients where to dispense their medications.
Comer took issue with the pharmacy testimony, arguing it conflicts with committee findings and research by the Federal Trade Commission, which is investigating the PBM industry. The Kentucky Republican, who has led the Oversight Committee since early last year, threatened Conway, Joyner and Kautzner with legal action, including up to five years in jail in addition to fines that could reach hundreds of thousands of dollars, if they didn’t walk back the alleged perjury.
However, Optum Rx, Express Scripts and Caremark are sticking by their executives’ words... Continue Reading
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