The Senate Commerce Committee yesterday passed BIO-supported legislation designed to bring transparency to pharmacy benefit managers (PBMs), which can increase the amount independent pharmacies and consumers pay for medicine.
The background: PBMs manage prescription drug benefits for insurance plans and payers. 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 through formulary exclusions.
The bipartisan Pharmacy Benefit Manager 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.”
“Three PBMs control 80% of the prescription drug market. PBMs pocket unknown sums of money that would otherwise be passed along as savings to consumers,” said Committee Chair Maria Cantwell (D-WA), a co-sponsor of the legislation.
The next steps: The Committee approved the legislation 19-9, and added two amendments—one requiring a Government Accountability Office report to examine PBM practices and potentially recommend further legislation, and another specifying which officials can bring civil suits against PBMs.
BIO’s take: “Simply put, current PBM practices are an impediment to competition, innovation, and patient access,” said BIO in a letter in support of the bill.
The context: The Federal Trade Commission (FTC) recently solicited comments on PBM business practices—here’s what BIO said. The pressure is increasing on both the FTC and Congress to take action on PBMs; Ranking Member Roger Wicker (R-MS) said “long-term solutions” to drug prices should come from the Senate HELP Committee and the FTC “should not be a catch-all.”
Listen: I am BIO Podcast: A Dysfunctional Drug Market Limits Patient Access
Read: What are PBMs, anyway?
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