Federal bill proposes FTC regulation of PBMs

Bipartisan legislation was introduced May 24 in the Senate that would allow the Federal Trade Commission to increase drug pricing transparency and suppress pharmacy benefit manager practices such as spread pricing and payment clawbacks.

The Pharmacy Benefit Manager Transparency Act of 2022 is supported by the National Community Pharmacists Association and the Community Oncology Alliance.

The FTC and state attorneys general could impose civil penalties for PBM companies for each violation and include an additional penalty of up to $1 million.

Included in the proposal:

  • PBMs would be banned from engaging in "spread pricing," or charging payers more for a prescription drug than what they reimburse pharmacies, and then taking the difference as profit.

  • PBMs would be banned from "arbitrarily, unfairly or deceptively" taking back payments made to pharmacies, increasing fees or lowering reimbursements to offset reimbursement changes in federally funded health plans. 

  • PBMs would be required to pass 100 percent of any rebate to payers and provide total disclosure of the cost, price and reimbursement of prescription drugs to payers and pharmacies. PBMs would also have to disclose all fees, markups and discounts they charge payers and pharmacies and would have to disclose aggregate remuneration fees they receive from drug manufacturers to payers and the federal government.

  • PBMs would be required to file an annual report with the FTC about how they charge payers and pharmacies for prescription drugs. The report would include the aggregate amount of the difference between how much a payer paid the PBM for prescription drugs; how much the PBM paid each pharmacy on behalf of payers for drugs; the aggregate total amount of fees the PBM charged to pharmacies; the total amount of reimbursements the PBM clawed back from pharmacies; why the cost, copay, coinsurance or deductible for a consumer increased; and why reimbursement rates to a pharmacy decreased for a prescription drug. For PBMs that control or have pharmacy affiliation, the report must include a description of any differences between what they reimburse or charge affiliated and non-affiliated pharmacies.

  • Whistleblowers could not be fired or face consequences for reporting violations, and employers could not force employees to waive those protections with arbitration agreements as a condition of employment.

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