A
bipartisan
group of members of the Senate Finance Committee on Wednesday introduced legislation to regulate the revenue stream of pharmacy benefits managers, or PBMs, in an effort to address rapidly rising prescription drug prices.
Committee Chairman
Ron Wyden
(D-OR)
said
in a press release that the legislation, the Patients Before Middlemen Act, “will put a stop to one of the most egregious practices driving up the price of prescription drugs in Medicare: pharmacy benefit managers getting paid based on the price of a drug.”
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PBMs
are third-party administrative organizations intended to negotiate drug prices between consumers and insurance companies. Traditionally, PBMs earn revenue in part based on the cost of prescription drugs, disincentivizing PBMs from negotiating for lower prices on behalf of insurance providers,
Medicare Part D
, and consumers at large.
The proposed legislation would
require
PBMs to instead charge a “flat dollar amount” service fee for the negotiation process and prohibits PBMs from charging in connection to the cost of a drug.
“As we work to find solutions that reduce prescription drug costs for patients at the pharmacy counter, this commonsense proposal will help mitigate misaligned incentives that currently steer some Medicare Part D plans, pharmacy benefit managers, and seniors toward higher-priced medications,” said Committee ranking member Mike Crapo (R-ID).
Crapo
added that the bipartisan legislation would be “a critical first step in … driving down out-of-pocket spending and promoting cost-cutting competition.”
PBMs have come under significant scrutiny from the federal government in recent months.
In May, the House Oversight Committee held the first in a
series
of hearings investigating the role of PBMs in drug prices entitled “Self-Interest or Healthcare?” during which members on both sides of the aisle expressed support for increased regulation on the negotiators.
At the time, JC Scott, CEO of the Pharmaceutical Care Management Association that represents the interests of PBMs,
voiced
concern that Congress would take steps to regulate PBMs without consulting with providers in the industry. PCMA has not yet responded to the Washington Examiner’s request for comment on the new Senate bill.
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The Federal Trade Commission has also been
investigating
PBMs for anti-competitive business practices, including their tight vertical integration with major insurance providers and the restrictions placed on clinicians and patients as to what pharmacies are covered.
Sen.
Bernie Sanders
(I-VT) on Monday
announced
that his Committee on Health, Education, Labor, and Pensions would not progress on the confirmation process of any of President Joe Biden’s Nominees for health-related roles until the administration actively addressed “how we’re going to lower the outrageously high costs of prescription drugs.”
