During a Senate Judiciary Committee hearing on Tuesday, Sen. Sheldon Whitehouse (D-RI) spoke about the price of prescription drugs.
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00:00thanks very much chairman good to have you all here for the hearing seems to
00:07me that pharmaceutical pricing is the decision of the pharmaceutical companies
00:13and big pharma would like nothing more than a world in which they control the
00:20prices they have huge sway in this building and their opposition if you
00:28want to call it that concerns on price come from individual patients who have
00:35essentially no market power we've seen really significant pricing abuses by big
00:46pharma we pay the highest prices in the world for a great many pharmaceuticals
00:53here President Trump is responding to how sick Americans are of pharma pricing by
01:02proposing his executive order to lower it and set US pharmaceutical pricing and
01:09international standards I think that's a signal of how things are going out there
01:15in that environment a PBM done right is the only institutionally powerful correction to
01:31pharma's hegemony over prices now we got a little bit of help by letting Medicare do some negotiation
01:41that's a start we hope we can do more of that but other than that it's just an
01:45open field advantage for big pharma to roll over individual patients with no
01:50structural opposition so a PBM done right is actually a counterforce to pharma's
01:58should we say exotic pricing structures because they're able to buy at scale
02:05because they can apply leverage because there is excess profit baked into the
02:12pharma pricing model they actually can provide a pretty important service I don't
02:19know about you but when I turn on my iPad I pretty much always now see an ad paid
02:26for by pharma trying to throw PBMs under the bus for pharma's pricing policies now if
02:34you're a big pharma people are mad about the way you price your drugs and why
02:36Americans have to pay more than essentially any other country for
02:42pharmaceutical costs then as President Trump noticed by announcing this next
02:49executive order there's a pretty fed-up public out there and pharma's response
02:56is not to lower its prices but to move PBMs in the line of fire and try to make
03:02them the source of the blame so I'm sort of watching what looks like a bit of a
03:09political strategy by big pharma to point the finger at PBMs there are clearly
03:16problems with PBMs and the worst problem is if the PBMs and big pharma are
03:21colluding if the PBMs and pharma are colluding to make the underlying
03:29pharmaceutical prices even higher and not complain about the basic pharmaceutical
03:34prices so that they have a bigger margin that they can negotiate for their
03:38clients so that they can get a bigger fee then you have both pharma and PBMs
03:47engaged in a essentially collusive enterprise to cheat the American consumer
03:54that behavior we need to get rid of but the idea that we need to get rid of PBMs
04:02when they're the only significant structural pushback on pharma's pricing I
04:09think would be a real mistake and what I'm seeing big pharma knowing that
04:14everybody's mad at them running all these ads throwing PBMs in the way of public
04:20irritation as if as if pharma doesn't control its own pricing I I worry about
04:28this mr. Scott who sets the prices for pharmaceutical products drug companies
04:35and drug companies alone yeah and you'd agree with me that if drug companies and
04:40PBMs are colluding to keep prices high just to give PBMs a bigger share and kind
04:45of a general truce so that custom consumers still get screwed that would
04:50be an abuse of the PBM model and that is not happening and you're pointing to the
04:54advertisements is good evidence there is no general truce we have been calling
04:58actively for drug companies to lower their list prices on all prescription
05:02drugs that's a key part of what we advocate for yeah well my time has expired but I
05:08think there's a role for PBMs here and I think the most important signal we're
05:13seeing right now is pharma's ad campaign trying to defend its exotic pricing
05:17techniques by putting somebody else in the line of political fire
05:23Senator Whitehouse you raised a lot of questions of the four bills that were in
05:27on the last Congress one on the House three in the Senate and none of them did
05:32away with PBMs but they all called for transparency and it seems the answer to
05:38all the questions you raised will be solved at least partly by transparency we
05:43worked on those bills together and finance mr. chairman we look forward to
05:46continuing to work with you on those bills I think we just have to understand
05:50what the problem is here in order to get the correct solutions and I thank you
05:55for that observation