Congressional pressure on pharmacy benefit managers continued to mount Wednesday as the Senate Finance Committee approved the latest bipartisan measure that would curb the industry's business practices.
The panel voted 26 to 0 to refer the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act of 2023 to the full Senate, with Sen. Ron Johnson (R-Wis.) declining to cast a vote. In addition to a slew of Medicare and Medicaid payment policies, the bill seeks to reduce prescription drug costs by imposing new rules on PBMs and health insurance companies.
The rules "are groundbreaking efforts that will protect community pharmacies from predatory PBM tactics and lower out-of-pocket costs for chronic disease drugs. The package will also further root out middlemen tactics that drive up health costs for patients and taxpayers," said Finance Committee Chairman Ron Wyden (D-Ore.).
This latest legislative activity comes after numerous House and Senate committees have advanced a slew of bills that include provisions PBMs oppose, such as limits or bans on spread pricing, delinking PBM compensation from drug prices and new transparency requirements. Bipartisan and bicameral support for these policies suggests President Joe Biden may have a final bill to sign before the year ends, although Congress has a full agenda that includes preventing a potential government shutdown before a short-term funding law expires at the end of Nov. 17.
The new Senate Finance Committee bill aims to support independent and rural drugstores by requiring that Medicare Part D plans contract with any willing pharmacy and by creating an "essential retail pharmacy" designation for shops in medically underserved areas not affiliated with PBMs or Part D plans.
Starting in 2028, Part D plans with preferred pharmacy networks would be required to contract with at least 80% of independent community pharmacies and 50% of all other essential retail pharmacies in their service areas. PBMs would have to pay independent essential retail pharmacies at rates no lower than a drug’s National Average Drug Acquisition Cost. The bill also limits so-called clawbacks of pharmacist payments and authorizes the Health and Human Services Department to fine PBMs that don't comply.
The legislation seeks to reduce cost-sharing under Medicare Part D plans by requiring that coinsurance be based on the net price of a drug, including drugmaker rebates, rather than on negotiated rates alone or on list prices.
The bill directs that Medicaid drug cost surveys include independent drugstores and PBM-operated mail-order and specialty pharmacies.
“When the Finance Committee approved the comprehensive and fully offset Modernizing and Ensuring PBM Accountability Act, we demonstrated the bipartisan conviction and momentum needed to move good policy from concept to law,” said Finance Committee ranking member Mike Crapo (R-Idaho). “This week’s markup builds on that strong foundation by incorporating additional priorities from senators across the committee to promote pharmacy access."
The Pharmaceutical Care Management Association panned the legislation. The PBM trade group's members include the three companies that dominate the market: CVS Health subsidiary CVS Caremark, Cigna subsidiary Express Scripts and UnitedHealth Group subsidiary OptumRx.
“The legislation would do nothing to lower drug prices and improve affordability for patients," the Pharmaceutical Care Management Association said in a news release. “Given that PBMs are the only check against drug companies’ pricing power, we urge members of Congress to refocus on legislation that promotes more competition and would actually lower drug prices for Americans.”
Transparency-Rx, a coalition of smaller PBMs that debuted in September, expressed support for the bill. "Because the legislation only impacts Medicare, this represents a necessary, but not sufficient, first step to meaningful reform of the PBM industry," the organization said in a news release. The PBM group also endorsed a bill the Senate Health, Education, Labor and Pensions Committee passed in May that would impose similar regulations on PBMs in the commercial insurance market.
Retail pharmacy groups praised the new Senate bill. "We’re grateful to Senate Finance for continuing their push forward. For the sake of patients and pharmacies, changes can’t come soon enough,” National Community Pharmacists Association Senior Vice President of Government Affairs Anne Cassity said in a news release.
The National Association of Chain Drug Stores also expressed support. "We commend the Senate Finance Committee’s bipartisan work to deliver on this unique moment of opportunity to reduce patient’s prescription drug costs, to defend patients’ access to medications and to pharmacies and to confront abusive PBM tactics that jeopardize all Americans and all pharmacies," President and CEO Steven Anderson said in a news release.