Senate Finance Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Ron Wyden (D-Oregon) introduced a bill Thursday to increase transparency in the practices of pharmacy benefit managers.
PBMs have come under widespread scrutiny in recent years due to their vertical integration with insurance companies and their practice of jacking up drug prices. The top three PBMs — CVS Caremark, Cigna's Express Scripts and UnitedHealth Group's Optum Rx — control about 80% of the prescription drug market.
The bill, called the PBM Price Transparency and Accountability Act, would decouple PBM compensation from negotiated rebates. This will inhibit the enthusiasm of PBMs to promote high-priced drugs. It would also add requirements for reporting PBMs to Medicare Part D plan sponsors and HHS and help plan sponsors audit their PBMs.
Additionally, it would strengthen the requirement that plan sponsors contract with any voluntary pharmacy that meets standard terms to protect rural independent pharmacies from harmful practices and closures. It would also require retail community pharmacies to participate in the National Average Drug Acquisition Cost (NADAC) survey to ensure more accurate Medicaid reimbursement rates.
Finally, PBMs need to direct Medicaid payments to pharmacies so that drug costs are more transparent to states and taxpayers.
“Pharmaceutical benefit managers should not profit by charging patients exorbitant prescription fees,” Crapo said in a statement. “This bipartisan legislation is a decisive step in making it easier for patients and pharmacies to navigate the prescription drug market. These proposals lay a solid foundation for further efforts to promote pharmacy access, demystify drug pricing, and reduce costs for taxpayers and seniors.”
Wyden echoed those comments.
“It’s long past time to hold accountable the middlemen who make prescription drugs more expensive for Americans,” he said. “The Finance Committee proposed a comprehensive approach to stop PBM business practices that are harming seniors and taxpayers who rely on Medicare to provide affordable prescription drugs. Now is the time to get this done.”
The bill is co-sponsored by 19 other senators, including John Barrasso (R-Wyo.), Michael Bennet (D-Colorado), Marsha Blackburn (R-Tenn.), Catherine Cortez Masto (D-Nev.) and Bill Cassidy (R-Louisiana).
Many efforts have been attempted to rein in pharmacy benefit managers, but few have actually achieved results. For example, last year the federal government came close to passing a spending bill to crack down on PBMs, but the provision was scrapped at the last minute.
Countries have also taken their own measures. California recently passed a law regulating PBMs. Arkansas also passed a law banning PBMs from owning dispensaries, but a federal judge blocked the bill from being enacted.
Photo: Stas_V, Getty Images
