In light of recent bipartisan efforts, lawmakers have introduced a new bill that aims to address the controversial business practices of drug supply chain middlemen. These middlemen, also known as pharmacy benefit managers (PBMs), have long been accused of inflating prescription medication prices, ultimately harming U.S. patients and pharmacies. The legislation, known as the “Pharmacists Fight Back Act,” seeks to ensure that community pharmacies are able to provide care to patients enrolled in federal health-care programs while being reimbursed fairly and transparently by PBMs.
Seniors covered by Medicare and Medicaid, government employees, active duty service members, and other patients stand to benefit from this bill. Lower health-care costs and increased freedom to choose a pharmacy of their choice are among the key points outlined in a fact sheet about the legislation. The bill, introduced by Reps. Jake Auchincloss and Diana Harshbarger, was unveiled ahead of a House Oversight and Accountability Committee hearing focusing on the tactics of drug supply chain middlemen.
Executives from three of the largest PBMs, including UnitedHealth Group’s Optum Rx, CVS Health’s Caremark, and Cigna’s Express Scripts, are set to testify on allegations that they contribute to rising healthcare costs. The government’s scrutiny of PBM practices has been mounting, with various bipartisan efforts at both the federal and state levels seeking to reform the way these middlemen operate.
The Need for PBM Reform
Lawmakers and drug manufacturers argue that PBMs overcharge the plans they negotiate rebates for, underpay pharmacies, and do not pass on savings from discounts to patients. This has allowed PBMs to accumulate billions of dollars in the drug supply chain. While PBMs maintain that drugmakers are responsible for setting high drug prices, legislators like Auchincloss believe that reform is necessary to prevent corporate greed from undermining the healthcare system.
Legislation targeting PBMs has garnered bipartisan support in Congress but has faced obstacles in terms of implementation. Momentum around PBM reform waned when it was excluded from a recent government spending package. However, the Biden administration has increased pressure on PBMs, with reports that the Federal Trade Commission plans to sue major players in the industry.
The Comprehensive Approach
The new bill introduced by Auchincloss and Harshbarger builds on previous efforts by increasing transparency around PBM practices and prohibiting practices such as spread pricing. The legislation is described as the most comprehensive PBM reform introduced at the federal level, with a focus on empowering pharmacies to provide quality care to patients.
One of the key aspects of the bill is a new pharmacy reimbursement model centered around the national average drug acquisition cost (NADAC). This model aims to ensure that pharmacies are reimbursed based on the actual cost of goods, particularly for generic prescription drugs. The bill also tackles the convoluted reimbursement system that currently exists, which involves multiple stakeholders and leads to ambiguity around fees and markups.
In addition to the reimbursement model, the bill includes provisions that require PBMs to share a significant portion of rebates with patients and prohibit various anti-competitive practices. By preventing PBMs from steering patients towards more expensive medications or affiliated pharmacies, the bill aims to protect the interests of independent pharmacies and make essential drugs more affordable for patients.
Moving Towards a Fairer Healthcare System
Overall, the “Pharmacists Fight Back Act” represents a significant step towards combating corporate greed in the drug supply chain. By addressing the practices of PBMs and empowering pharmacies to provide quality care to patients, this legislation has the potential to bring about substantial reform in the pharmaceutical industry. As lawmakers continue to push for change, the fight against rising medication prices and healthcare costs remains a critical priority.