The Big Story 

A measure to change how the pharmacy benefit manager industry operates failed to make it into the last government funding bill, but lawmakers are still turning up the pressure. 

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The Hill spoke with JC Scott, president and CEO of the industry’s lobbying group Pharmaceutical Care Management Association, ahead of a House hearing on PBM practices Wednesday.

The interview has been edited for clarity and length: 

The Hill: Starting narrowly, what are you expecting to hear from lawmakers on Wednesday? 

Scott: This is the 18th congressional hearing focused solely on PBMs in the last two years. So if you think about everything in the prescription drug space, the fact that they are focused this amount of time and energy on PBMs and not focused on fundamentals like drug company list prices is pretty astounding to me… I suspect this is all connected to additional legislation here coming down the road.  

Are you expecting new legislation, or for Congress to resurrect the changes that didn’t make it into the [December] continuing resolution? 

It’s our understanding that they will at some point try again to move the health extenders package that they had teed up at the end of last year that ultimately got scaled down when they scaled down the CR.  

Among the PBM provisions in that bill, which one would be the most damaging? 

The piece that I would say is most concerning for us … is this provision that came in at the 11th hour that mandates in the commercial markets that all contracts be 100 percent rebate pass through. So what that is saying is there’s only one way to contract. There’s only one way to pay for PBM services. There can be no differentiation or diversity in the PBM marketplace, and as a principle, we have deep concern with taking that choice away from employers, union, plans, other private market clients, and the precedent that Congress could set by heading down that road. 

Does the PBM industry have allies in Congress? 

I find that those who have the best grasp of the value that PBMs deliver are those who have worked in the private sector and contracted directly with PBMs on behalf of their employer, or if they worked in the HR benefits space, or they otherwise have that real life experience to understand exactly why employers choose to contract with PBMs and the value that gets delivered. 

Where are the biggest threats to PBMs coming from? 

I think that the biggest risk comes from the continued frustrating lack of understanding of how our companies work and the value that they deliver. So until we do a better job of helping policy makers across the spectrum to understand the important role the PBMs play is the only actors in the market who are focused on lowering costs. 

It’s a misunderstanding that’s stimulated by misinformation put into the discussion by the pharmaceutical lobby and other stakeholders. The reality is, the rebates are nothing more than negotiated discounts achieved through group purchasing economics… generally speaking, I do think there is a still a fundamentally misinformed viewpoint on what a rebate is and how that flows. 

Does it concern you that drug company executives were at the White House last week, and that they’ve been having dinners with Trump? 

It does not surprise me that they are seeking out policymaker engagements. That’s certainly the job of the pharma lobby, is to try and find opportunities to share their perspective, just as it’s our job to find opportunities to share our perspective. We generally don’t promote and advertise when we’re having meetings with policymakers in the media or the press. 

Are you worried that this White House could be more pro-pharma than the previous administration? 

I will say I’m encouraged to hear the president, the new HHS [Health and Human Services] secretary [Robert F. Kennedy Jr.], and others focus on things like the disparity in pricing that we see between what pharma charges consumers here in the United States and what they charge in other countries. 

Trump did say, ‘we’re going to knock out the middlemen’ called you ‘horrible middlemen.’ Have you seen any sort of follow-up from that? 

I think those comments are indicative of the need for us to continue to do a better job in explaining our role and the value that our companies deliver … I don’t know that I have any insight or visibility, and to some extent, it’s probably too soon to say what they want to do in the prescription drug pricing space.

Welcome to The Hill’s Health Care newsletter, we’re Nathaniel Weixel, Joseph Choi and Alejandra O’Connell-Domenech — every week we follow the moves in Washington impacting your health.

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