During a Senate Judiciary Committee hearing on Tuesday, Sen. Thom Tillis (R-NC) spoke about the future of pharmacy benefit managers.
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00:00Senator Tillis. Thank you, Mr. Chairman. Thanks to all the witnesses for being here. I, as Senator Durbin, was making some opening comments. Senator Durbin, I think we're probably going to leave this meeting also saying what a mess. And one of the reasons I think that we are is we talk past each other and we're not talking about the entire value chain.
00:20And until we do, we're going to pick our favorite target, whether it's pharma, whether it's PBMs, and we're going to keep spinning our wheels.
00:30If you take a look at bad policy, I think in the ACA everybody's high-fiving because pharma took a haircut.
00:37Nobody's talking about how wonderful it was that we had a 60 percent reduction in small molecule research, which we all know is one of the most promising fields for therapies and cures going forward.
00:48So you've got to understand the consequences. If some of these companies were so flush with cash and can manage the risk, why on earth are they publicly saying in board meetings that they have a 60 percent reduction collectively in small molecule research?
01:04Just one point. I actually think everybody needs to get into the barber shop. I've been saying this for years.
01:12A haircut should be coming, but everybody has to be in the barber shop.
01:18The question is, are we going to end up with a haircut like Mike Lee's or one like John Kennedy's?
01:24No offense, Mike. I like your new haircut. It's a compliment. I know it.
01:30But the point is, is we keep talking past each other. I can't even get TRICARE, the biggest PBM for federal employees, one that I'm on.
01:41I can't even get transparency from them. I tried it in the prior administration. I want to audit the TRICARE PBM.
01:46At least we can eat our own dog food, right? And audit our PBM. But what I get back in response to a request on pricing information is a heavily redacted report.
01:55This administration, I'm going to try again. I tried it with the Biden administration.
02:00Can we at least audit our own PBM and, in a confidential way, figure out what's in the black box?
02:09And I think if we start doing that systematically, Professor Sood, I think some of your insights specifically into PBMs are probably correct.
02:18We're probably going to find out. I mean, I believe that one thing we have to recognize is the PBM mission has varied dramatically since it was first established.
02:29And so the question is, is that mission creep necessary or not necessary? Is it value added or is it adding cost?
02:36But until we get into a structured analysis and get everybody in the barbershop versus using this forum to demonize a link in the value chain,
02:49then we're going to end up with the same old hearing that I've been to for the better part of 10 years now.
02:53We do it every year. It's great. Love it. We hear some very insightful comments and we get nothing done.
03:00So I do think that today and I have to respectfully disagree with the president.
03:04Well, in the same way that I've criticized my colleagues and the former President Biden for a 60 percent reduction in small molecule research,
03:13for using marching rights, trip waivers, everything else to solve this problem, I think they're wrong minded.
03:19What is right minded is to modernize PBMs, figure out what their value added is, determine how we implement price transparency,
03:27and then we will create something that has an enduring value for the only person I care about.
03:34And that's the patient.
03:37So I do have a quick question for you, Mr. Scott.
03:41What's wrong with Mr. Professor Sood's suggestion that PBM should operate as a fiduciary?
03:49Just on a basic level, the definition essentially of a fiduciary is a person or entity who is in a position of control
03:56and decision making authority over another person's property or finances.
04:00The role of the PBM when hired by the employer or others is to recommend and to administer benefits at their direction.
04:07They don't make decisions for plan sponsors. They don't have that decision making authority.
04:11Then what else would need to change to make it reasonable?
04:14Well, I think what a number of you have been pushing at around transparency is an important thing to comment on.
04:20Because we have leaned in as an industry to try and engage with the committee, both sides of the Congress, on embracing transparency.
04:28If Congress says you want to set a floor, then we'll work with you to set that floor, as long as our clients can choose additional add-ons to that in terms of data.
04:37Scott, I hate to break you off, but, Senator Grassley, I really think that one of the things that we should probably do,
04:43outside of the structure of a committee, is to have a work group for those of us who are willing to participate.
04:52Get all the players at the table so that we can have a good old-fashioned debate club versus the very limited question and answer that we have here.
04:59And that would be something, if you're okay with, I'd like to follow your lead.
05:04If not, then I'm likely to convene it myself so that I can get everybody in the room and we can have a very transparent discussion and comprehensive discussion about how we fix the value chain and how we ultimately address this problem.
05:18The most favored nation coming out of the administration.
05:21All these other things are short-sighted, unsustainable measures that are not going to produce the result I do believe all of us on this committee want to achieve.
05:29It's not the what, but we've got a very wide range of differences on the how.
05:33Thank you, Mr. Chair.
05:48And I think we'd have to get those chairmen to agree to that.