April 22, 2026
The Honorable Rick Allen|
Chairman
Education and Workforce Subcommittee on Health, Employment, Labor, and Pensions
Washington, DC 20515
The Honorable Mark DeSaulnier
Ranking Member
Education and Workforce Subcommittee on Health, Employment, Labor, and Pensions
Washington, DC 20515
Dear Chairman Allen, Ranking Member DeSaulnier, and Members of the Subcommittee,
On behalf of National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, we commend the Subcommittee for holding a hearing entitled “Profits Over Patients: The PBM Business Model Under Scrutiny.” Ensuring prescription drugs remain affordable is essential to controlling the growth of U.S. health care spending and limiting the burden federal health programs impose on taxpayers. We encourage the Subcommittee to explore how promoting transparency in the prescription drug supply chain can reduce costs without limiting access for patients.
The Subcommittee is right to focus its attention on prescription drug affordability. Unfortunately, federal policy in recent years has singled out drug manufacturers with price controls while leaving other actors such as pharmacy benefit managers (PBMs), insurers, and hospitals out of comprehensive policy solutions. Studies show that intermediaries in the pharmaceutical supply chain capture about one-third of total drug expenditures. Any serious effort to control spending on drugs therefore needs to address the incentives and distortions across the prescription drug supply chain, instead of just squeezing pharmaceutical manufacturers with self-defeating price controls.
Against this backdrop of counterproductive policies, it is welcome to see lawmakers turn their attention to the role that middlemen such as PBMs play in making prescription drugs more expensive than they need to be. By aggregating purchasing power and negotiating rebates, PBMs can play an important role in helping control drug spending for employers and government programs. However, growing consolidation in recent years, along with opaque pricing practices, raise legitimate concerns that savings are not always passed down to patients and taxpayers.
NTU encourages the Subcommittee to focus its efforts on increasing transparency, especially around the practice of spread pricing, where PBMs keep the difference between what they charge health plans and what they reimburse pharmacies. These hidden markups inflate federal health spending, and taxpayers stand to benefit tremendously from reforms that bring greater accountability and clarity to how federal health dollars are spent. Furthermore, additional disclosure from PBMs on the use of specialty pharmacies in Medicare and Medicaid would help address current gaps in CMS reporting requirements.
NTU has written extensively about how taxpayers can benefit from increased visibility into PBMs’ pricing practices. This in-depth report details how opaque reimbursement structures inflate federal spending, while this blog post and this op-ed both explain why strengthening disclosure requirements would yield better results for patients and taxpayers alike than heavy-handed regulation.
We appreciate the Subcommittee’s leadership on this issue and stand ready to assist in developing legislative solutions that put patients first.
Sincerely,
Alexander Ciccone
Policy and Government Affairs Manager
National Taxpayers Union