[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},"mediaId",6306632,"mediaKeyId","2436959-52974bd34a78f9eb7847debc852149cc","parentId",2436959,"title","Members debate Republican budget directive to find $880 billion in cuts and potential effects on Medicaid","audioSeconds",2679,"startMs",1337000,"endMs",4016000,"viewUrl","/Search/View?dp=1&key=2436959-52974bd34a78f9eb7847debc852149cc&start=1337&end=4016","thumbnailUrl","https://assets.pipeline.soar.com/2436959-52974bd34a78f9eb7847debc852149cc/thumbnail_1337000.jpg","articleUrl","/articles/6306632/Members-debate-Republican-budget-directive-to-find-880-billion-in-cuts-and-potential-effects-on-Medicaid","mediaUrl","https://secure.pipeline.soar.com/6306632-16bc625f1d21cb9cfb587329e6805bc7/orig.mp4?Expires=1770705133&Signature=P04Yyhe-e13ofX2Tr2KKv2OEqIbi7K7m42bEWpQTrgIAtHLQt3T2NCpXd3iQHVExRjklppsc5fAQkeGLl7a~uy2L42kdQg1ty1y5MOiSMlctG-PIG~ESMNm2QrDSlY2idxsuLfFrGf~xqAr5vcB63q8qC9XSgxj23qdu4b8j2PXU3y8kgPk6r9Xe6wiLh4Ucbj5~lg5zbFRrcy7yLyC-unTmmFI-K9kYEzXaD9Za8hU8ueQuN8TYDh0klrsCHDYFZnD6KaNi~QZEv5yAXS2zDU2U~xN4fOyuLFYEBi8SPBjy8enmQRSAPyF38BjLvpZnXtf4Ywf~54HfJ2eath3pBw__&Key-Pair-Id=KUT5TJCACFTXG","author","U.S. House Committee on Energy and Commerce","date","2025-02-27T06:23:25Z","article","Lawmakers used the PBM hearing to cross-examine a parallel and politically fraught question: a House Republican budget resolution that directs committees, including Energy and Commerce, to find at least $880 billion in savings.

Why it matters: Committee Democrats argued that the size and timing of that target make Medicaid the only realistic funding source and that cuts of that magnitude would force states to reduce coverage, benefits or provider payments—measures Democrats said would harm children, pregnant people, seniors and rural hospitals.

Representative Frank Pallone, ranking member of the full Energy and Commerce Committee, warned that the proposed cuts were large enough to “rip health care coverage out of the hands of everyday Americans” and that changing the time horizon or other budget assumptions does not obviate real program reductions. “You simply cannot take that amount of money out of the Medicaid program and not hurt the people who rely on it,” Pallone said.

Witnesses and members raised concrete impacts if federal support for Medicaid expansion or overall FMAP levels were reduced. Brookings’ Dr. Matthew Fiedler estimated that eliminating the enhanced match for Medicaid expansion would leave states with a mid‑tens‑of‑billions‑of‑dollars gap—forcing many states to drop expansion or otherwise make difficult choices such as raising taxes or cutting services. He told members that “if the enhanced match for expansion were to go away, the current expansion states would need to come up with 40 to $50,000,000,000 a year to fill in that budget hole.”

Members representing rural districts sounded alarms about hospital and maternity‑ward capacity. Representative Jaime Herrera Beutler (questioning on behalf of rural concerns) and others warned that reductions in Medicaid funding would increase uncompensated care burdens and could precipitate closures or service line cuts in financially precarious rural hospitals.

Democrats repeatedly tied the budget resolution debate to the PBM discussion to make a broader argument: PBM reforms that increase transparency and remove wasteful payment practices could produce savings, but those reforms do not substitute for the scale of federal support that Medicaid provides for access to care. Several Democrats emphasized that reforms to PBMs are necessary but insufficient to offset sweeping budget cuts.

Republican members said the committee should pursue PBM reforms while also pressing for broader fiscal accountability. Representative [multiple Republicans in questioning] said the committee has many areas to seek savings; several members urged using the PBM reform package as one part of broader cost‑reduction efforts.

No formal committee vote on Medicaid policy occurred during the hearing; members of both parties left the hearing urging further work in committee and on the floor. The hearing record and member statements included multiple references to the December continuing resolution, whose bipartisan PBM provisions were removed before enactment.","mediaType","Video","parentTitle","Health Hearing: An Examination of How Reining in PBMs Will Drive Competition and Lower Costs","oneSentenceSummary","During a House Energy and Commerce subcommittee hearing on PBMs, members debated a Republican budget directive asking committees to identify $880 billion in savings and warned that the cuts could fall on Medicaid and related services.","taxTitle","Energy and Commerce: House Committee, Standing Committees - House & Senate, Congressional Hearings Compilation, Legislative, Federal","taxId",1824,"location","","headline","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},6306637,"Energy and Commerce hearing spotlights pharmacy benefit managers' role in high drug costs and local pharmacy closures",6331,494000,6825000,"/Search/View?dp=1&key=2436959-52974bd34a78f9eb7847debc852149cc&start=494&end=6825","https://assets.pipeline.soar.com/2436959-52974bd34a78f9eb7847debc852149cc/thumbnail_494000.jpg","/articles/6306637/Energy-and-Commerce-hearing-spotlights-pharmacy-benefit-managers-role-in-high-drug-costs-and-local-pharmacy-closures","https://secure.pipeline.soar.com/6306637-0618c81be7bae3346d26e037a4d5e60d/orig.mp4?Expires=1770705133&Signature=IfMukHiNZVce28Gou9E2U8T1td9Z22s81rh6zrt3YehomnPA0yKxDANiDUFGYOiaMbH31vTR2SWN13oksEdQPfFeWNnYUq81odfw-vheUTQ83MTQlNnr9WMySosaC0fa5xdztP~ndvtZhTx-WxZkbl7jiKtbrFVZ5JVqGcYDJgJ~tNwDQF0qPaCV6QOnakSsWhAUC0SEKi4nOPTpENte2jN0Y4xFOpg-zLL5sVkE50u~8zkCfDm2JBmZI63WzvTQJZUBJV4EyLjY2Mli3OxO9lz45L-RbuiMA~RCViR~2BnioQMT2X0qQE9g~TaTRm65-~RefOw6~G8tokEOZB2saA__&Key-Pair-Id=KUT5TJCACFTXG","Chairman Carter convened a House Energy and Commerce subcommittee hearing on pharmacy benefit managers (PBMs), where lawmakers and expert witnesses described PBM market concentration and opaque business practices as contributors to rising prescription costs and shrinking access to local pharmacies.

The hearing brought patient stories, state audit findings and federal reports into the record and featured testimony from independent pharmacists, employer-purchaser representatives, consumer advocates and health economists.

Why it matters: Witnesses and members said PBM practices—rebate-driven formularies, spread pricing, and vertical integration—can increase list prices, raise patient out-of-pocket costs, and steer business to PBM-affiliated pharmacies, which they said harms independent pharmacies and can reduce access to care, particularly in rural or underserved areas.

Hugh Chancey, a pharmacist and co-owner of Chancey Drugs, told the subcommittee that PBM practices have jeopardized his pharmacy’s ability to serve people in South Georgia. Chancey testified that “the top 3 PBMs control over 80% of the market,” and described instances in which PBMs steered patients away from community pharmacies and required mail-order fills that led to late or missed medications.

Sean Grimminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, urged stronger transparency and called for plan-level disclosure so employers can assess what they actually pay for each drug. “Most self funded employers to this day do not know how much money they are spending on any specific drug,” Grimminger said.

Anthony Wright, executive director of Families USA, said PBM opacity contributes to higher premiums and cost-sharing, and urged Congress to require that savings and discounts be passed through to payers and consumers.

Brookings economist Matthew Fiedler cautioned that transparency is likely to produce modest savings on its own but said it could improve competition and enforce existing contract terms. “Greater transparency would likely reduce the price of PBM services by making it easier for payers to comparison shop, enforce existing contracts, or press their PBMs for better terms,” Fiedler testified.

Members and witnesses cited federal and state findings. The subcommittee referenced a Federal Trade Commission interim report and state audits that found large differentials in reimbursement between PBM-affiliated pharmacies and independent pharmacies, and an inspector general audit that found Express Scripts overcharged the United States Postal Service health plan by about $45,000,000.

Several members emphasized specific reforms that were included in a bipartisan end-of-year package that did not become law: banning spread pricing in Medicaid, enforcing reasonable contract terms between PBMs and pharmacies in Medicare Part D, and adding disclosure requirements for PBM activities in the commercial market. Witnesses said those provisions would increase transparency, reduce opportunities for perverse incentives, and protect community pharmacies.

No bill votes were recorded at the hearing. The subcommittee did record procedural unanimous-consent entries into the record: Representative Carter asked unanimous consent to submit letters supporting PBM reform from patient, provider, pharmacist, small business and advocacy organizations; the chair said, “No objection.” Representative Diana DeGette also asked unanimous consent to place a 17‑page list of negotiated provisions from last year’s bipartisan package into the record; the chair responded, “Without objection.”

Members pressed witnesses on tradeoffs. Fiedler said changes to PBM compensation structures (for example, banning rebates) could create trade-offs that might alter PBM negotiating incentives and that the effects would depend on how payers adjust. Other witnesses argued the current rebate-driven system inflates list prices and misaligns incentives.

Independent pharmacy data and state experience drew prominent attention. Witnesses and members cited more than 300 independent pharmacy net closures in 2023 and large state audit findings of spread-pricing revenue in Medicaid managed care (Kentucky, Ohio, West Virginia, North Dakota were named by witnesses). Chancey said his company alone employs over 100 people and that community pharmacies serve as local health-care hubs during disasters.

Lawmakers from both parties expressed support for reform. Ranking Member Diana DeGette (D-Colo.) and several Republican members urged moving the bipartisan package to the floor; others urged alternative routes such as a suspension vote. Several members also tied PBM reform to broader affordability steps, but cautioned that PBM changes are not a substitute for addressing other cost drivers such as drug manufacturer prices.

The hearing closed after member questioning; members were given 10 business days to submit additional written questions for the record.

Ending: Witnesses and committee leaders repeatedly framed PBM reform as bipartisan and urgent—but no new legislation was passed during the hearing. Lawmakers and witnesses asked the committee to pursue the transparency, contract and payment reforms discussed so that employers, patients and pharmacies can better see where money flows in the drug supply chain and where savings might be realized.","Chairman Carter convened a House Energy and Commerce subcommittee hearing on pharmacy benefit managers (PBMs), where lawmakers and expert witnesses said PBM market concentration and opaque pricing were driving higher prescription costs and independent pharmacy closures.","actionData","errors"]

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Members debate Republican budget directive to find $880 billion in cuts and potential effects on Medicaid

Energy and Commerce hearing spotlights pharmacy benefit managers' role in high drug costs and local pharmacy closures