PBMs, Employers Agree on Senate Transparency Bill: They Both Hate It!

Despite the bad reviews, the bipartisan bill cleared the Senate Commerce, Science and Transportation Committee on Wednesday.

Rival lobbyists for pharmacy benefits managers and employer-sponsored health plans finally agree on something. Both sides hate the U.S. Senate's bipartisan  Pharmacy Benefit Managers Transparency Act.

After that, agreement abruptly ends. PBMs say the bill goes too far. Employer groups say the bill doesn't go far enough.

Despite their opposition, the bill, co-sponsored by Senate Commerce, Science and Transportation Chair Maria Cantwell (D-WA), and Budget Committee ranking member Chuck Grassley (R-IA), cleared Cantwell's committee on Wednesday on an 18-9 vote.

The Congressional Budget Office has estimated that, if enacted, the bill would reduce the federal deficit by about $740 million in drug savings over the next decade.

Employers Prescription for Affordable Drugs, aka EmployersRx, in a letter to leadership on the Commerce, Science and Transportation Committee, says it has "grave concerns about the bill."  

"While the bill includes PBM transparency language, it does not include the specific information that is needed and is focused on information related to reimbursement and payment to pharmacies," the letter states.

"Importantly, the legislation fails to specify the exact parameters of PBM responsibility," EmployersRx says. "There is inadequate oversight and regulation of PBM-owned pharmacies, and inadequate limitation on so-called ‘spread pricing.' The bill outlaws certain PBM practices but fails to address direct payments related to drug formulary placement."

"Reform is needed to ensure fairness to independent pharmacies and ensure that patients are treated fairly at PBM-owned pharmacies. However, transparency for the primary customers of PBMs--employers—is a critical aspect to reform and is completely missing in this bill," the letter states.

On the other hand, Greg Lopes, spokesman for the Pharmaceutical Care Management Association, says the bill "is contentious legislation that would expand the authority and jurisdiction of the Federal Trade Commission."

"The bill would grant the FTC unprecedented power to pick industry winners and losers, rather than maintaining the agency's focus on the consumer welfare standard," Lopes says in an email exchange with HealthLeaders.

"And (it) would set a precedent for allowing the FTC to regulate prices and dictate the terms of common business practices in any industry," Lopes says. "In addition, the legislation risks increasing prescription drug costs and would take away employers' choice and flexibility in designing pharmacy benefits that best fit the needs of their enrollees."

Instead of Cantwell's bill, Lopes says PBMs want the Senate to take up legislation recently approved by the Senate Judiciary Committee that "encourages greater competition and investment in more affordable options, like biosimilars, by eliminating common and egregious anti-competitive, patent abuse practices used by drug companies."