The fight to lower drug prices has featured a war between the big drug companies and the businesses known as Pharmaceutical Benefit Managers (PBMs), each blaming the other for the outrageous costs of urgently needed prescription drugs.
(PBMs are companies that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers. By negotiating with drug manufacturers and pharmacies to control drug spending, PBMs have a significant behind-the-scenes impact in determining total drug costs for insurers, shaping patients’ access to medications, and determining how much pharmacies are paid.)
Last week, according to Bloomberg News, key committees in both houses of Congress voted to advance legislation targeting the actions of PBMs.
The Senate Finance Committee, which has jurisdiction over Medicare and Medicaid, overwhelmingly passed the bi-partisan Medicare PBM Accountability Act. The bill would establish new requirements for PBMs to submit annual reports to Medicare drug plans, disclosing price negotiations and rebate information that affect what seniors pay in premiums and co-pays.
With six PBMs now controlling 95% of the private market, enhanced transparency around how PBMs are delivering and paying for prescription drugs would help Medicare drug plans select PBMs that best serve the needs of beneficiaries, lowering costs for seniors and taxpayers.
The legislation also would ban spread pricing, which occurs when a PBM charges Medicaid more than it pays for prescription drugs.
On the other side of the Capitol, the House Ways and Means Committee voted along party lines, 25-16, to pass the Health Care Price Transparency Act of 2023, which requires PBMs to disclose information about their workers’ drug claims and out-of-pocket expenses to employers.
According to its supporters, the bill will:
- Provide key patient protections by promoting transparency and use of health insurance pricing information.
- Codify an existing rule that health insurers already comply with while strengthening transparency.
- Mandate price transparency requirements via a patient-specific transparency tool.
- Implement a requirement to make machine-readable files for out-of-network rates, in-network rates, and drug prices public.
The separate bills in the House and Senate now must be sent to the respective floors of each house to be voted on.