It's time to re-examine the role of pharmacy benefit managers and understand how their financial arrangements work, Health and Human Services Secretary Alex Azar said Friday.
President Donald Trump is to unveil on Friday his plan to lower prescription drug prices. Pharmacy benefit managers, which negotiate with drug manufacturers, have been a common target from industry and lately even administration officials.
Drugmakers accuse the PBMs of profiting off higher list prices because they can negotiate bigger discounts. PBMs say it's manufacturers' fault for setting the high prices in the first place.
Azar, in an interview with CNBC's "Squawk Box," said everybody's gaining something from higher list prices — except patients and taxpayers.
"Everybody is wetting their beak on a percent of a higher list price, and we've got to change those dynamics," said Azar, a former executive at pharmaceutical giant Eli Lilly.
"We have to fundamentally examine and re-examine the role of pharmacy benefit managers, which serve a very important function in this system of negotiating, but how do the financial arrangements work? Who are they collecting money from? And how are things structured in terms of that list price to net price dynamic? Because those incentives are driving it," Azar said.
A summary of the blueprint, dubbed "American Patients First," mentions pharmacy benefit managers but does not include any proposals directly aimed at them. The administration is slated to publish the entire plan Friday in conjunction with Trump's speech.