Yet another bill that aims to reform the pharmacy benefit management industry has been introduced in Congress, this time by the Senate Finance Committee.
The Patients Before Middlemen Act would prevent PBMs that contract with Medicare Part D plans from tying service fees to the price of a drug, rebates, discounts or other fees. PBMs would also not be allowed to stipulate compensation based on drug price as a condition of entering a contract.
In addition, the bill would establish an enforcement mechanism that would require PBMs to repay the Department of Health and Human Services any amount that exceeds the designated fees.
The bipartisan legislation is backed by Sens. Ron Wyden, D-Oregon; Mike Crapo, R-Idaho; Bob Menendez, D-New Jersey.; Marsha Blackburn, R-Tennessee; Jon Tester, D-Montana; and Roger Marshall, R-Kansas.
In a statement, Wyden, who chairs the committee, said the bill addresses the role PBMs play in driving up drug costs.
“This legislation will put a stop to one of the most egregious practices driving up the price of prescription drugs in Medicare: pharmacy benefit managers getting paid based on the price of a drug,” Wyden said in a statement. “Instead of fighting for lower prices, this practice has encouraged drug middlemen to favor higher-priced drugs in their negotiations, which means seniors are forced to pay more for their prescriptions.”
PBMs have become a punching bag on the Hill has legislators seek solutions to rising drug costs in the U.S. Another bill in the Senate Health, Education, Labor and Pensions Committee would ban spread pricing practices, and a House bill seeks to advance greater transparency in the industry.
Pharmacy benefit managers have also been key focuses in policymakers’ conversations about healthcare consolidation. The PBM space is dominated by three large firms, all of which are vertically integrated with major health plans: CVS Caremark, a sister company to Aetna; Optum Rx, which is owned by UnitedHealth Group; and Express Scripts, which is owned by Cigna.
In addition, the Federal Trade Commission is probing PBMs’ business practices, including group purchasing organizations that are also vertically integrated with major firms.
The Pharmaceutical Care Management Association (PCMA), which represents major PBMs, slammed the bill in a statement. The organization said the legislation “appears to buy into the false rhetoric and self-serving agenda of big drug companies.”
“Unlike big drug companies, pharmacy benefit companies are compensated based on how effectively they secure savings for employers, patients and taxpayers—serving as the only real check against drug companies’ otherwise unlimited pricing power,” the PCMA said. “Undermining this critical role would play directly into the pharmaceutical industry’s scheme to avoid accountability for their anti-competitive practices and unfaltering commitment to keeping prescription drug prices high, costing all of us as patients and taxpayers.”