TAPP Applauds Bipartisan Pharmacy Benefit Manager Accountability Bill

The Trade Alliance to Promote Prosperity applauds bipartisan pharmacy benefit manager (PBM) accountability legislation recently proposed in Congress and is calling for its swift passage.

Earlier this month, U.S. Senate Finance Committee Chairman Mike Crapo (R-Idaho) and Ranking Member Ron Wyden (D-Oregon) introduced the Pharmacy Benefit Manager (PBM) Price Transparency and Accountability Act to “fix market distortions and increase transparency in federal prescription drug programs to lower patient costs at the pharmacy counter.” 

The problems that the legislation aims to solve are acute. PBMs inflate their profits by preferencing more expensive medicines when designing formularies. By setting favorable prices and cost-sharing amounts, PBMs influence the amount that patients pay out of pocket and which medicines they can access through their insurance. If a drug isn’t on the formulary, insurers won’t cover it and often doctors won’t prescribe it.

Today, the three largest PBMs—CVS Caremark, Express Scripts, and OptumRx—constitute about 80 percent of the entire PBM market and administer drug benefits for over 270 million Americans.

The trend of vertical integration and consolidation in the PBM industry is warping the drug market in drastic ways. American patients and taxpayers should not be kept in the dark about the bureaucratic schemes that so negatively impact the cost of their medicines.

The PBM Price Transparency and Accountability Act would:

  • Delink PBM compensation from their negotiated rebates to disincentivize PBMs from promoting higher-priced medications;

  • Increase PBM reporting requirements to Medicare Part D plan sponsors and to the U.S. Department of Health and Human Services (HHS) and empower Part D plan sponsors to audit their PBM for compliance with contract requirements;

  • Reinforce existing requirements that plan sponsors contract with any willing pharmacy that meets their standard contract terms and conditions to better protect independent pharmacies in rural areas from practices that have contributed to widespread closures;

  • Require participation by retail community pharmacies in the National Average Drug Acquisition Cost (NADAC) survey, which would ensure accurate Medicaid payments to pharmacies; and

  • Mandate PBMs pass Medicaid payments directly to pharmacies to ensure transparent drug costs for states and taxpayers.

The coauthors of the bill are Senators John Barrasso (R-Wyoming), Michael Bennet (D-Colorado), Marsha Blackburn (R-Tennessee), Catherine Cortez Masto (D-Nevada), Bill Cassidy (R-Louisiana), Maggie Hassan (D-New Hampshire), John Cornyn (R-Texas), Ben Ray Luján (D-New Mexico), Steve Daines (R-Montana), Tina Smith (D-Minnesota), Chuck Grassley (R-Iowa), Mark Warner (D-Virginia), James Lankford (R-Oklahoma), Raphael Warnock (D-Georgia), Roger Marshall (R-Kansas), Peter Welch (D-Vermont), John Thune (R-South Dakota), Sheldon Whitehouse (D-Rhode Island) and Thom Tillis (R-North Carolina).

Through social media and other channels, the Trade Alliance to Promote Prosperity is encouraging swift passage of the PBM Price Transparency and Accountability Act.

Ainsley Shea