Prepared Opening Statement by Senator Chuck Grassley of Iowa
Chairman, Senate Judiciary Committee
“PBM Power Play: Examining Competition Issues in the Prescription Drug Supply Chain”
Tuesday, May 13, 2025
Good morning. I’d like to welcome everyone to this hearing examining competition issues in the prescription drug supply chain.
Pharmacy benefit managers, or PBMs, play a significant role in the drug supply chain. Initially, PBMs primarily served in an administrative capacity. But their role has evolved, and they now exercise growing influence on the prescription drug supply chain. And as a middleman, they determine what medications a patient can use and how much the patient pays at the pharmacy counter.
PBMs have also become more consolidated. The three major PBMs control roughly 80 percent of the PBM market. And many are vertically integrated with insurance companies, providers and more.
This power drives up prescription drug costs at the pharmacy counter. Indeed, a recent report found patient out-of-pocket drug costs reached 98 billion dollars in 2024, a 25 percent increase in five years.
PBMs claim, on the contrary, that they help lower costs. Yet their business practices are opaque, and they do everything in their power to steer business away from competition towards their own entity. I’m committed to bringing sunshine and accountability to PBMs.
Throughout my 99 county tour of Iowa, I’ve learned firsthand from patients and pharmacists the powerful role PBMs play in our prescription drug supply chain.
To name one example, last summer, an Iowan told me her prescription medication had increased from $300 to $1,000 per month.
Another Iowan wrote to me recently saying she is “scared” about her local pharmacy closing, which would leave a void in her community.
I hear often from rural Iowa pharmacists about the vital services they provide for their community. We have one Iowa independent pharmacy with us today. But they don’t know how much longer they can stay open.
PBMs are steering more patients away from their local pharmacies through low reimbursement, mail-order requirements and limiting patient choice.
Iowans are fed up with the skyrocketing cost of prescription drugs and reduced access. Americans are fed up. They’re eager for Congress to act to put a stop to shady PBM practices.
So I’ve taken a multi-faceted approach to lowering drug costs and holding PBMs accountable.
I partnered with Senator Wyden on a two-year investigation into insulin price gouging. Our investigation found that PBMs encourage drug makers to spike the drug’s list price in order to offer a greater rebate. This, in turn, allows manufacturers to secure priority placement on covered meds—all at the expense of patients.
I’ve pressed the FTC to study PBMs and their impact on competition and drug prices. The FTC’s two interim staff reports are helpful. But I’m eager to get their full study, complete with legislative recommendations. That’s why this Committee recently passed the Prescription Pricing for the People Act, which would hold the FTC accountable in producing their PBM study in a timely manner.
A timely report on PBMs is critical, but we can stop some anti-competitive PBM behavior today. Arbitrary clawbacks and spread pricing are documented tactics PBMs deploy to fill their pockets at the expense of patients and pharmacies. This has to stop.
Senator Cantwell and I have worked on the PBM Transparency Act through the Commerce Committee to direct the FTC to stop deceptive and unfair pricing schemes by PBMs, as well as to require more transparency.
I’ve also worked on and supported the Finance Committee’s PBM legislation from last Congress.
For too long, PBMs have played a powerful role in determining a patient’s access to prescription drugs and their costs. PBMs have only expanded that role in recent years. But their pocketbooks have expanded in ways that don’t add up based on the services they provide. While PBMs get richer, hardworking Americans are paying more and more for their medications. Local pharmacies are shuttering. I’m hopeful that this hearing will shine light on how we can rebalance the power and hold PBMs accountable.
I look forward to hearing from our witnesses.
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