Washington, D.C. — Insurance Watchdog Coalition (IWC) today sent a letter to leaders of the Senate Health, Education, Labor, and Pensions (HELP) Committee calling on lawmakers to broaden their approach to lowering prescription drug costs by addressing the role of health insurance companies in determining what patients pay.
In the letter to Chairman Bill Cassidy, Ranking Member Bernie Sanders, and members of the Committee, IWC commended their ongoing efforts to reduce drug prices but warns that current policy discussions risk overlooking a central driver of patient costs: insurance design and insurer-controlled pricing mechanisms. New polling released from IWC reveals that voters nationwide – and across the political spectrum – overwhelming support insurance reform as the top priority in improving health care.
“While policymakers have taken important steps to address drug pricing, insurance barriers remain the greatest threat to affordability,” said Mark Merritt, executive director of IWC. “For most patients, out-of-pocket costs are set by insurers – not drug manufacturers – and often bear little relationship to list prices.”
The letter outlines how rising premiums, restrictive formularies, and high out-of-pocket costs continue to limit access to medications, even as policymakers pursue pharmaceutical pricing reforms.
IWC’s letter also highlights structural concerns within the insurance system, particularly the growing vertical integration of insurers with pharmacy benefit managers (PBMs), specialty pharmacies, and provider groups. According to the Coalition, these arrangements create conflicts of interest and enable insurers to influence pricing and access decisions across the prescription drug supply chain.
The letter raises specific concerns about the use of affiliated PBM group purchasing organizations (PBM GPOs), including those domiciled offshore, which can be used to retain manufacturer rebates and reduce transparency into whether savings are passed on to patients.
Recent federal enforcement activity underscores these risks. The Federal Trade Commission has reached a settlement with Express Scripts, a subsidiary of Cigna, related to aspects of its rebate and PBM GPO arrangements. Similar structures remain in place across other major PBMs affiliated with large insurers.
In addition, IWC points to federal policy opportunities to reduce waste and improve affordability. It highlights the No Unreasonable Payments, Coding, or Diagnoses for the Elderly (No UPCODE) Act as one example, noting that eliminating an estimated $124 billion in excess payments could help lower out-of-pocket costs for Medicare beneficiaries.
“Patients are facing increasing barriers to care – from prior authorization delays to coverage denials – while opaque pricing structures make it harder to understand where healthcare dollars go,” Merritt said. “We urge the Committee to take a comprehensive approach that includes meaningful insurance reform.”
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Insurance Watchdog Coalition’s mission is to educate legislators, regulators, key opinion leaders, the media and the American people about the harmful impacts of vertically integrated insurance monopolies, especially in our healthcare system, which in turn will help create more competition in the marketplace, lower healthcare costs, and ensure that healthcare savings go to patients, not big insurers.