Good Day BIO: Bipartisan bill would address PBMs

A bipartisan bill introduced this week would address PBM transparency and business practices, and new data shows how PBM formulary exclusion lists continue to grow. Plus, details on a new biotech hub in Alabama. (725 words, 3 minutes, 37 seconds)

Bipartisan bill would address PBM business practices, empower FTC

Sens. Maria Cantwell (D-WA) and Chuck Grassley (R-IA) introduced the Pharmacy Benefit Manager Transparency Act of 2022, which would address long-standing problems with PBM business practices and outlaw “spread pricing”—and BIO supports it.

The PBM Transparency Act of 2022 would “make it illegal for PBMs to engage in ‘spread pricing’ in which they charge health plans and payers more for a prescription drug than what they reimburse to the pharmacy, and then pocket the difference,” says the fact sheet. “The bill would also prohibit PBMs from arbitrarily, unfairly, or deceptively clawing back payments made to pharmacies…or lowering reimbursements to offset reimbursement changes in federally-funded health plans.”

The background: PBMs manage prescription drug benefits for insurance plans and payers. They’re often vertically integrated with insurance plans, and the three largest PBMs handle 80% of all prescriptions in the U.S. They receive rebates and discounts on drug prices and they're supposed to pass savings on to patients—but they often don’t, and in fact limit access via formulary exclusions.

The result: This system harms the sickest patients the most, BIO’s Dan Durham explained on a recent episode of the I am BIO Podcast.

Read: What are PBMs, anyway?

PBM formulary exclusions are “skyrocketing,”says a new white paper from health policy consulting firm Xcenda. The three largest PBMs’ formulary exclusion lists increased from 850 unique drugs in 2020 to 1,156 unique drugs in 2022— “often excluding medicines for conditions where it is particularly important for patients and physicians to have multiple treatment options, such as oncology and autoimmune disorders.”

BIO applauds the introduction of the bill—telling the co-sponsors in a letter yesterday it “will further bolster the FTC’s authority to address”…“the role PBMs play in the market for medicines and whose interests they serve.” 

The context: The Federal Trade Commission (FTC) has been soliciting comments on PBM business practices, which were due yesterday—here’s what BIO said. The pressure is increasing on both the FTC and Congress to take action on PBMs.

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Southern Research building new biotech center in Alabama

Southern Research broke ground on May 16 for an $84 million biotechnology center in Birmingham, Alabama—Bio.News has the scoop.

The details: The flagship biotech center will anchor the development of 200,000 square feet of new or renovated wet lab space for life sciences and host biotech startups, as well as serve as a research hub for Southern Research and the University of Alabama.

The impact: The new center will “double the Southern Research’s economic impact to $300 million annually,” according to Business Alabama, and create about 150 new jobs, AL.com reports. 

What they’re saying: “Southern Research’s biotech center will converge bioscience assets from across the state and exemplifies our state’s commitment to building this industry,” said BIO Alabama CEO Rachel Lane. “There is a lot to be excited about with this project, but Southern Research’s commitment to facilitating bioscience entrepreneurism is vital to creating the critical mass that will propel our industry forward.” 

The context: The U.S. bioscience industry employs 1.87 million people across more than 101,000 U.S. businesses—and states are key to propelling the industry and innovation forward, said a report published earlier this year by BIO and the Council of State Bioscience Associations (CSBA).

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President Biden’s Thursday: Yesterday, the second anniversary of George Floyd’s death, Biden signed an executive order “requiring new use-of-force rules for federal law enforcement and encouraging local police departments to make similar changes,” reports NPR. Meanwhile, POLITICO examines a presidency marked by a “historic convergence of crises.” 

What’s Happening on Capitol Hill: With a renewed focus on gun safety, The Hill looks at gun-related bills currently stalled in Congress. The Senate Agriculture, Nutrition, and Forestry Committee will hold a hearing on opportunities and challenges facing farmers, families, and rural communities with Agriculture Secretary Tom Vilsack.