00:00Thank you, Mr. Chairman. I thank all of the panelists for being here.
00:05Prescription drug supply chain is not competitive.
00:08I think that is very clear, based not just on today's testimony, but in prior hearings.
00:16One of the reasons is vertical integration.
00:19So, Professor Sued, you were asked by my colleague just now, what things would you do?
00:25Can you just explain why we shouldn't try to break up the vertical integration situation?
00:35We do have a bill that would require the divestiture of PBN's owning pharmacies.
00:45So, why wouldn't that be a structural change that we should be contemplating?
00:49So, I think we can contemplate that change, but I'm not sure if that change is required or how disruptive that change would be.
01:00I would encourage, you know, DOJ and FTC to look at antitrust issues related to vertical integration and try to address them.
01:10And if that can address these issues, then we don't need to take the more heavy-handed approach, which would be forcing PBMs to divest pharmacies, etc.
01:21So, I'm not saying I'm not just fully sold on that right now, but I recognize that there are antitrust issues and DOJ and FTC should address that.
01:33Well, we're not expecting too much along these lines from either entity, by the way, because the FTC had opened some, I think, investigation along the lines that you suggest.
01:45And there are some markets that just are not given to competition.
01:49And I would say this is one of them.
01:51And I'm not blaming PBMs over the drug companies.
01:56This is not a matter of whose fault it is, but there are some structural kinds of changes.
02:01And I would say that a vertically integrated entity, you just immediately have created a conflict situation.
02:08And so, one of the ways that antitrust comes in is by requiring divestiture.
02:14And having practiced in this space as an antitrust lawyer, I think that there are some markets, as I say, that are not given to the kind of reforms that you're talking about.
02:27So, we can have all the price transparency you want, but if you don't have much power, so what?
02:33So, even if the three largest PBNs control 80% plus, even if there's transparency in pricing, if there's a lack of power on the part of the entities that they are working with, really the question becomes to me, so what?
02:51Now, I am also at a loss as to why we permit spread pricing.
02:59So, Ms. Faust, yours is a pass-through PBN.
03:05Why shouldn't we require all PBNs to be passed through and not engage in the kind of spread pricing that certain entities, such as, I would say, the Iowa AGs, said that the spread pricing enable PBNs to retain millions and millions
03:26in probably undue profits.
03:30So, what do you say about eliminating spread pricing?
03:35There are some states that have done that, including Hawaii.
03:39We support transparency, and that includes transparency to what pharmacies are being paid,
03:45which is why our model aligns with clients paying what pharmacies are paid and no spread or capture in the middle.
03:53That supports both pharmacies and the plans, which should really be the gold standard to support patient care.
04:01Professor Soot?
04:04I agree that I think, you know, I would support eliminating spread pricing.
04:11I don't see how it serves patients.
04:13Dr. Kircher, you have real-life experience in your cancer patients, and cancer treatments are, I understand, I know, from my own experience, very complicated.
04:27And you have the medications and the impacts of medications.
04:32So, you have had patients who have literally been at death's door because you're not able to get the PBNs to move fast enough,
04:39and they do not have the expertise to decide which medication is the most efficacious.
04:45So, what is the kind of reform that we need to do with prior approval by PBNs?
04:51Yeah, and I think a good point has been made by a lot of people in this committee of that.
04:55It's probably not just the PBNs.
04:58I think there's every line in the chain coming from the manufacturers, the payers, you know,
05:03payer solutions as well as we saw with the Inflation Act and insulin.
05:07But, I mean, I think we need to – I got lost in the question.
05:14What was the question again?
05:15Prior approval.
05:16What can we do to reform prior approval?
05:18No, I think these drugs are so expensive that we get it, that you need prior approval.
05:22We just need them resolved quickly and effortlessly.
05:28You know, I think that's the main thing that we're asking, not that they don't exist, but that we can resolve them quickly.
05:35I think that is a hard road to go, considering they don't really –
05:40PBNs don't really have the expertise, from my understanding, of making these determinations quickly.
