Yet another bipartisan piece of legislation was introduced Friday that aims to keep pharmacy benefit managers (PBMs) in check.
This time it’s the Drug Price Transparency in Medicaid Act, introduced in the House by Rep. Earl “Buddy” Carter (R-Georgia), Rep. Vicente Gonzalez (D-Texas), Rep. Elise Stefanik (R-New York), Rep. Deborah Ross (D-North Carolina), Rep. Rick Allen (R-Georgia) and Rep. Jake Auchincloss (D-Massachusetts). The bill would ban spread pricing in Medicaid programs. Spread pricing is a practice used by PBMs in which they charge health plans more for prescription drugs than what they pay the pharmacies and then keep the difference.
“PBMs have been allowed to rob patients, small businesses, and taxpayers blind for decades. As a pharmacist, I’ve seen firsthand how patients have been forced to stay sick and forgo medication due to the broken process. With this bill, we can hold PBMs accountable for their role in increasing the cost of health care and pocketing taxpayer money,” Carter said in a news release.
The bill was first introduced by the last Congress in 2021. Auchincloss said it will lower prescription drug prices for patients.
“For far too long, PBMs have been allowed to collect taxpayer dollars without reducing the costs of drugs for Medicaid patients. Increasing transparency in pricing and cracking down on PBMs will put money back where it belongs — into the pockets of patients dependent on life-saving medication. This bill builds on the work done last Congress to lower the cost of drugs and finally holds PBMs accountable,” Auchincloss said in a statement.
The legislation has gained support from the National Association of Specialty Pharmacy (NASP), an advocacy organization for specialty pharmacies. NASP President and CEO Sheila Arquette said the bill will benefit patients, specialty pharmacies, Medicaid and taxpayers.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“Anticompetitive business practices threaten specialty pharmacy businesses, and therefore, patient access to specialty pharmacies,” Arquette said Friday in a statement. “Such practices ultimately result in patients forgoing the medications they need, resulting in life-threatening consequences and increased Medicaid costs through preventable hospitalizations and medical complications.”
The federal government has been increasing pressure against PBMs recently. Earlier this month, House Committee on Oversight and Accountability chairman James Comer (R-Kentucky) launched an investigation into PBMs and their “tactics that are harming patient care and increasing costs for consumers.” Comer sent letters to CVS Caremark, Express Scripts and OptumRx — which control 80% of the PBM marketplace — asking for documents and information about their tactics, including incentives that encourage patients to use pharmacies owned by them.
In January, another bipartisan piece of legislation targeting PBMs was introduced in the Senate: the Pharmacy Benefit Manager Transparency Act of 2023. It was introduced by Sen. Maria Cantwell (D-Washington) and Sen. Chuck Grassley (R-Iowa) and would also ban PBMs from participating in spread pricing, as well as clawing back reimbursement payments. The Senate Commerce Committee held a hearing in February discussing how the bill would affect drug prices, in which one senator questioned why PBMs are even necessary.
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