PBS News Hour

The CEOs of seven pharmaceutical giants gathered before the Senate Finance Committee on Tuesday to answer lawmakers’ questions about why U.S. drug prices are high — and rising.

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In the hearing, pharmaceutical executives blamed drug rebates for muddling market prices and artificially inflating costs. They hammered the pharmaceutical benefits managers, often called PBMs, that negotiate these rebates for private insurance companies and Medicare prescription drug plans. That’s only part of the story, said Edwin Park, research professor at Georgetown University McCourt School of Public Policy. He said drug company executives’ hands are not bound by these rebates. “They claim that they would lower list prices substantially if they did not have to provide rebates,” Park said. But if rebates disappeared and list prices didn’t drop, the result “could just mean higher costs, while providing considerable windfalls to manufacturers.”

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