Sens. Bernie Sanders, I-Vermont, and Bill Cassidy, R-Louisiana, reached a deal on new legislation that aims to increase access to generic drugs and impose transparency measures on pharmacy middlemen.
The two senators, the new leaders of the powerful Senate Committee on Health, Education, Labor and Pensions (HELP), said the legislative package will “reform pharmacy benefit managers and expand the availability of low-cost generic drugs.”
The committee will hold a hearing on May 2 to consider the legislative package, which includes four bills.
A new bill from Sanders, Senate HELP Committee chair, Cassidy, ranking member, and Sens. Patty Murray and Roger Marshall would make a variety of reforms to how pharmacy benefit managers (PBMs) operate. The bill would increase transparency for plans to use PBMs as well as impose transparency measures on PBMs, as well as ban spread pricing and mandate that PBMs pass 100% of the rebates collected from drug makers to the health plans.
Other bills in the package would increase oversight of the Food and Drug Administration’s citizen petition process, take aim at anti-competitive practices among drug companies that allow fewer lower-cost generic products to come to market and keep prices higher for consumers and revise laws governing orphan drug exclusivities.
The Senate HELP Committee holds major sway over healthcare policy. There also is growing momentum on Capitol Hill to reform the PBM industry.
Pharmacy benefit managers, or PBMs, are third-party administrators of prescription drug benefits for 266 million people who have health insurance coverage through commercial health plans, self-insured employers, state employee health plans, Medicare Part D plans, Medicaid managed care and others.
Last week, the Senate Finance Committee released its plan to reform pharmacy benefit managers. Sen. Ron Wyden, D-Oregon, the committee’s chair, and Mike Crapo, R-Idaho, its ranking member, unveiled the framework that aims to address four key concerns from PBM critics: a lack of transparency, barriers to access for pharmacies, “behind-the-scenes practices” that can hinder competition and poorly-aligned incentives that increase drug costs.
The policy plan follows a hearing in late March that aimed to find solutions to rethink the PBM sphere. Executives from the industry’s three largest players—CVS Caremark, Express Scripts and Optum Rx—were absent from that hearing, though they will join a Health, Education, Labor and Pensions Committee hearing in early May centered on insulin and drug pricing.
It is the latest bid by lawmakers to address the PBM industry, which has gotten bipartisan support even in a divided Congress where the GOP controls the House.
In March, a group of House lawmakers introduced legislation, The Drug Transparency in Medicaid Act, aiming to outlaw the use of spread pricing by pharmacy benefit managers in the Medicaid program.
In addition to the pressure on the Hill, the Federal Trade Commission has launched an investigation into PBMs’ business practices.