It’s time for a fact-check of North Carolina politics. This week we’re turning our attention to a TV ad that mentions Republican Sen. Ted Budd.
The narrator of the ad makes these claims: “Bernie Sanders is at it again. This time with a radical plan to increase government control of your pharmacy benefits. Shattering your pharmacy benefits, increasing drug costs and threatening private health insurance. Call Ted Budd. Tell him to oppose Bernie’s radical health care takeover.”
We turn now to Paul Specht of WRAL.
Marshall Terry: OK. First, Paul, who's behind this ad?
Paul Specht: It's a group called Citizens Against Government Waste, and more specifically, it's their lobbying arm, which is technically a different group called the Council for Citizens Against Government Waste. They're a nonpartisan group, but most of their positions lean conservative, so they're interested in reducing federal government spending and regulation.
Terry: So what is this plan by Bernie Sanders? And what are pharmacy benefit managers?
Specht: Pharmacy benefit managers are this group of people that probably a lot of people have not heard of. They work behind the scenes. They're more in the business world, you might say B-to-B instead of business-to-customer. They're not really public-facing. They work with your health insurance companies as well as local pharmacies to decide what kind of prescription drugs will be covered by your health insurance plan, what costs will be paid and things like that. Lately, people have identified them as the source of the problem when it comes to high prescription drug costs. Now they say that's not fair. They say you know that they've been doing this a long time, and the cost of prescription drugs has risen. And so it's the drug manufacturers who deserve more scrutiny.
But here they are, sort of the target of this bill. PBM's as they're known —
pharmacy benefit managers — they often receive rebates that are calculated as a percentage of a drug manufacturer’s list price. And so, basically, the bigger savings that they secure, the more that they can keep. And so this bill by Bernie Sanders would increase transparency of what PBM's actually do and how they operate. It would require them to pass on all of the rebates they get from drug manufacturers to the employers, or the people who have the health care plans — and it would ban something called price spreading, which is when a pharmacy benefit manager charges an insurance plan, a price for prescription drug that exceeds the price paid by the pharmacy.
So it's pretty complicated, but basically the PBM's are doing a lot of negotiating for these drugs. And then the savings they get, oftentimes they are keeping. Now they would say oftentimes they're passing along that savings, as well. But for Bernie and people who support this bill, they want to see more of those savings passed along.
Terry: So how does Sen. Ted Budd fit into all of this? And why is he being targeted in this ad?
Specht: He was one of 18 people to support the bill in committee, and there were only three that opposed it. And so it seems like he's being targeted by this group as part of their pressure campaign. This group opposes regulation, and they obviously don't want to see this bill pass. And so the ad encourages people to pick up the phone and call Sen. Budd’s office and tell them what they think, in hopes that the bill is either shot down or just doesn't make it far enough to become law.
Terry: Now they're targeting Budd in a non-election year. Why is that? And is that a normal thing to do?
Specht: You know, we see that occasionally and it really happens with issue bills like this. Obviously this is, like you said, a non-election year. Budd won't be up for another five years. You know, with these six-year Senate terms, my assumption is they're just trying to gin up opposition and to slow down the process. This bill does have a lot of bipartisan support. So, it seems to have a decent chance of becoming law.
Terry: So how did you rate the claims made in this ad?
Specht: It talked about raising prices and shattering people's health care plans. PolitiFact doesn't tend to rate statements about the future unless we can tangibly look at a bill and see what's happening. And so we rated the claim that the bill would “increase government control” and (rated) the claim that it was a radical health care takeover.
There's a sliver of truth here, in that it would increase government control of pharmacy benefit managers. It would require them to pass along more of their savings to employers and health care plans. But the notion that this is a radical health care takeover is way, way off base. This received bipartisan support. The experts we spoke with even said the changes that are proposed would not bring sweeping, radical, transformative change to people’s pharmaceutical or health insurance plans. For all those reasons, we rated this claim mostly false.
