Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) and Chair Ron Wyden (D-Oregon) unveiled a framework Thursday that aims to change pharmacy benefit managers’ (PBMs) practices and reduce drug costs.
The framework laid out four key challenges that federal prescription drug programs are dealing with:
- “Misaligned incentives” that are raising drug costs for consumers
- A lack of transparency that makes it difficult for patients to make decisions for their health
- Independent and regional pharmacies struggling to stay open due to vertical integration
- Pharmacy benefit manager practices that are inhibiting competition and raising costs. These practices include spread pricing, when PBMs charge health plans more for prescription drugs than what they paid the pharmacies and then keep the difference.
These actions by PBMs are hurting Americans, Wyden said.
“For years, drug pricing middlemen like pharmacy benefit managers have been engaging in practices that are driving up the cost of prescription drugs and clobbering American families at the pharmacy counter,” Wyden stated in a news release about the framework. “The Finance Committee is responsible for federal health programs that spend billions on prescription drugs each year, and we have a responsibility to seniors, working families and taxpayers to ensure these programs are strengthened and updated to keep up with the health care system of today.”
To address these challenges, the senators suggested several potential legislative solutions, including “delinking” payment for PBMs from drug prices and increasing transparency. The framework also suggests making sure that discounts negotiated by PBMs create significant savings for seniors.
“Some of the most life-saving medications remain out of reach for far too many working families and seniors,” Crapo said in a statement. “We need a bipartisan, all-of-the-above approach to modernization and transparency that empowers consumers, plans, providers and pharmacies to make informed, cost-effective and clinically appropriate decisions.”
The framework follows a Finance Committee hearing that was held last month and discussed the effect of PBM practices on drug prices.
This isn’t the only recent bipartisan action against PBMs. Last month, a group of House representatives introduced the Drug Price Transparency in Medicaid Act, which would ban spread pricing in Medicaid programs. In January, Sen. Maria Cantwell (D-Washington) and Sen. Chuck Grassley (R-Iowa) introduced the Pharmacy Benefit Manager Transparency Act of 2023, which would also ban PBMs from participating in spread pricing, as well as prohibit them from clawing back reimbursements.
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