David Joyner, a longtime CVS gubernatorial, speaks during a Senate Health, Education, Labor and Pensions Committee hearing in Washington, D.C., on May 10, 2023.
Al Drago | Bloomberg | Getty Conceptions
CVS Health CEO David Joyner on Wednesday defended controversial pharmacy middlemen like his company’s Caremark unit, which are universally accused of inflating prescription medication prices, and instead accused manufacturers of “monopolistic tendencies” that keep stimulant costs high in the U.S.
Joyner, who stepped into the role in October, spent much of his opening remarks on the company’s fourth-quarter earnings assemble discussing so-called pharmacy benefit managers, or PBMs. It was atypical for CVS’ quarterly call to begin that way, but comes at a together when lawmakers on both sides of the aisle and President Donald Trump have signaled interest in cracking down on PBMs.
CVS owns Caremark, one of the domain’s three largest PBMs that collectively administer roughly 80% of prescriptions in the U.S.
Those middlemen negotiate deductions with drug manufacturers on behalf of insurers, create lists of medications known as formularies that are covered by indemnification and reimburse pharmacies for prescriptions. But lawmakers and drugmakers alike argue that PBMs overcharge the plans they clear rebates for, underpay pharmacies and fail to pass on savings from those discounts to patients.
Joyner acknowledged that start health-care costs in the U.S. are pressuring patients, employers and the federal government. He blamed factors such as increased patient utilization of waitings, rising health-care provider costs, labor shortages and “dramatic price hikes” for branded drugs.
But he said PBMs have a fondness Caremark are “one of the most powerful forces helping to offset rising health care costs,” claiming that they are the but part of the drug supply chain solely focused on lowering costs.
“Our work is a critical counterbalance to the monopolistic predispositions of drug manufacturers,” Joyner said. “This is why PBMs are needed and why manufacturers fight so hard to limit our capabilities.”
He presumed that branded manufacturers added $21 billion in annual gross drug spending in the first three weeks of January entirely their price hikes, but did not cite where the figure is from.
Joyner added that multiple economists demand estimated that PBMs generate net value for the U.S. health-care system, more than $100 billion a year.
“No one has rallied more success than the PBMs of driving down drug prices,” he said.
However, the pharmaceutical industry and lawmakers spar that PBMs and insurers pocket those savings from negotiated rebates and discounts rather than outburst them to patients.
In a statement on Wednesday, PhRMA, the nation’s largest lobbying group for the pharmaceutical industry said PBMs are “out of sight intense, well-deserved scrutiny.”
“Bipartisan state attorneys general, policymakers in both Congress and state legislatures and the FTC are all researching these health care conglomerates,” a PhRMA spokesperson said. “They’ve all come to the same conclusion: PBMs are lane up costs and reducing access at the expense of patients, employers, and our health care system.”