Senators Kane and Chairman Propose Delinking PBM Payments from Drug Prices
July 31, 2025 | Health, Education, Labor, and Pensions: Senate Committee, Standing Committees - House & Senate, Congressional Hearings Compilation
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The U.S. Senate Committee on Health, Education, Labor, and Pensions convened on July 31, 2025, to address the pressing issue of making health care more affordable, focusing particularly on the role of pharmacy benefit managers (PBMs) in the healthcare system. The meeting highlighted concerns regarding the monopolistic practices of PBMs and their impact on drug pricing and patient access to medications.
The session began with discussions led by Senator Kane and others about a proposed bill aimed at "delinking" PBM compensation from the list prices of drugs. This legislation seeks to address the current structure where PBMs, which control a significant portion of the market, are incentivized to favor higher-priced medications over more affordable generic options. Mr. Potter, a witness at the meeting, expressed strong support for the delinking proposal, arguing that it would help lower drug costs for patients by reducing the financial incentives for PBMs to maintain inflated list prices.
Further discussions delved into the complexities of the healthcare payment system, particularly the significant administrative costs associated with high-cost claims. Ms. Deacon provided a striking example where a medical provider received $875,000 for a claim, while the total amount paid by the health plan exceeded $4 million, with a substantial portion retained by Cigna and its third-party vendors as administrative fees. This raised critical questions about the value of such expenditures and the need for greater transparency in healthcare pricing.
Doctor Miller emphasized the necessity for accountability and competition within the healthcare market, suggesting that the Federal Trade Commission (FTC) should conduct retrospective reviews of past PBM mergers. He noted that many of these mergers were approved under the assumption they would lower prices, yet they have often resulted in increased market power and challenges for independent pharmacies.
The meeting concluded with a consensus among the participants on the need for reforms that enhance transparency, competition, and accountability in the healthcare system. The discussions underscored the urgency of addressing the structural issues within the PBM industry to ensure that patients can access affordable medications and receive quality care without excessive financial burdens. The committee plans to continue exploring these issues and potential legislative solutions in future sessions.
The session began with discussions led by Senator Kane and others about a proposed bill aimed at "delinking" PBM compensation from the list prices of drugs. This legislation seeks to address the current structure where PBMs, which control a significant portion of the market, are incentivized to favor higher-priced medications over more affordable generic options. Mr. Potter, a witness at the meeting, expressed strong support for the delinking proposal, arguing that it would help lower drug costs for patients by reducing the financial incentives for PBMs to maintain inflated list prices.
Further discussions delved into the complexities of the healthcare payment system, particularly the significant administrative costs associated with high-cost claims. Ms. Deacon provided a striking example where a medical provider received $875,000 for a claim, while the total amount paid by the health plan exceeded $4 million, with a substantial portion retained by Cigna and its third-party vendors as administrative fees. This raised critical questions about the value of such expenditures and the need for greater transparency in healthcare pricing.
Doctor Miller emphasized the necessity for accountability and competition within the healthcare market, suggesting that the Federal Trade Commission (FTC) should conduct retrospective reviews of past PBM mergers. He noted that many of these mergers were approved under the assumption they would lower prices, yet they have often resulted in increased market power and challenges for independent pharmacies.
The meeting concluded with a consensus among the participants on the need for reforms that enhance transparency, competition, and accountability in the healthcare system. The discussions underscored the urgency of addressing the structural issues within the PBM industry to ensure that patients can access affordable medications and receive quality care without excessive financial burdens. The committee plans to continue exploring these issues and potential legislative solutions in future sessions.
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