Senate Finance Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Ron Wyden (D-Oregon) introduced a bill Thursday that aims to bring more transparency into the practices of pharmacy benefit managers.
PBMs have come under a lot of scrutiny in recent years due to their vertical integration with insurers and practices that inflate 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, titled the PBM Price Transparency and Accountability Act, would delink PBM compensation from negotiated rebates. This would disincentivize PBMs from promoting higher-priced drugs. It would also increase reporting requirements for PBMs to Medicare Part D plan sponsors and HHS, as well as help plan sponsors audit their PBMs.
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In addition, it would strengthen requirements that plan sponsors contract with any willing pharmacy that meets standard terms to protect rural independent pharmacies from harmful practices and closures. It would also mandate retail community pharmacies to participate in the National Average Drug Acquisition Cost (NADAC) survey to ensure more accurate Medicaid reimbursement rates.
Lastly, PBMs would be required to pass Medicaid payments directly to pharmacies so that there is more transparency in drug costs for states and taxpayers.
“Pharmacy benefit managers should not profit from overcharging patients for their prescriptions,” said Crapo in a statement. “This bipartisan legislation is a decisive step toward making the prescription drug market easier to navigate for both patients and pharmacies. These proposals form a strong foundation for additional efforts to promote pharmacy access, demystify drug pricing and reduce costs for both taxpayers and seniors.”
Wyden echoed these comments.
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“It’s long past time to go after middlemen who are making Americans’ prescription drugs more expensive,” he said. “The Finance Committee has put forward a comprehensive approach to stop the pharmacy benefit manager business practices that are harming seniors and taxpayers who count on Medicare to deliver affordable prescription drugs. It’s time to get this done.”
The bill was co-sponsored by 19 additional senators, including John Barrasso (R-Wyoming), Michael Bennet (D-Colorado), Marsha Blackburn (R-Tennessee), Catherine Cortez Masto (D-Nevada) and Bill Cassidy (R-Louisiana).
Numerous efforts have been attempted to rein in pharmacy benefit managers, though few have actually come to fruition. For example, last year, the federal government almost passed a spending bill that would have cracked down on PBMs, but this provision was taken out at the last minute.
States have also taken their own steps. California recently passed a law that will regulate PBMs. Arkansas also passed a law that would ban PBMs from owning pharmacies, but a federal judge has blocked this from being enacted.
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