Senators reintroduce bills to reform PBM industry

A bipartisan group of senators are once again pushing for new regulations around the pharmacy benefit manager industry.

Democratic Sen. Maria Cantwell and Republican Sen. Chuck Grassley reintroduced the Pharmacy Benefit Manager Transparency Act and the Prescription Pricing for the People Act Jan. 27, which they say will increase drug pricing transparency and suppress PBM practices such as spread pricing and payment clawbacks.

"For too long, Americans have been left in the dark while PBMs – the mysterious middlemen – manipulate prescription drug prices," Sen. Cantwell said in a news release. "We need to hold PBMs accountable for skyrocketing drug costs."

The Prescription Pricing for the People Act would require the FTC to study consolidation in the PBM industry, which is majority controlled by Caremark, Optum Rx and Express Scripts. While the agency does have an active PBM probe, "it is important they conduct a thorough and timely study of the pharmaceutical supply chain," according to the news release.

The bills were also introduced in 2022 but did not make it to President Joe Biden's desk to become law. 

"As we enter the year, PBM regulations are going to be a top priority for lawmakers and for federal agencies in general," Darwin Hale, PhD, founder and CEO of Advocate Health Advisors, said.

Included in the PBM Transparency Act:

  • 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.

The Pharmaceutical Care Management Association, a PBM trade group, told Becker's in a statement it is opposed to the PBM Transparency Act because it will ultimately raise costs on patients and give more drug pricing power to large drug manufacturers.

“Unfortunately, the legislation continues to fundamentally misconstrue the role of pharmacy benefit companies and unfairly proposes to ban basic business practices that are proven to reduce prescription drug costs for patients, employers, and taxpayers," a spokesperson said. "In addition, the bill provides for an egregious expansion of the power, authority, and jurisdiction of the Federal Trade Commission, allowing the agency to pick winners and losers and setting a precarious precedent that suggests the FTC should regulate prices and business practices, which could apply to any industry.

The PCMA is supportive of the Prescription Pricing for the People Act because it "will better reflect the role big drug companies play in setting and raising prices, and uncover the common and egregious anticompetitive practices and patent abuses some big drug companies exploit to stymie competition, and unfairly extend monopolies to keep drug prices high.”

In 2023, the legislative push against PBMs is also bipartisan at the state level, with lawmakers from Florida to Oregon currently proposing tightened regulations around the middleman industry.

In 2021, 18 states passed or had legislation become effective involving PBM licensing or registration requirements, and 10 states had PBM-focused legislation pass in 2022.

"Both parties obviously have strong opinions and objectives, but they agree on drug pricing and oversite," Dr. Hale said. "There's renewed focus on PBMs because they are an intermediary and because price transparency isn't quite where Congress would like it."


Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Top 40 articles from the past 6 months