WASHINGTON – Sens. Chuck Grassley (R-Iowa) and Tom Carper (D-Del.) today introduced legislation to shed sunlight on pharmaceutical industry practices for determining medication prices and coverage, Grassley’s latest effort to lower prescription drug costs. With this bipartisan bill, the lawmakers are seeking to enhance transparency around the development of drug formularies under Medicare Part D and hold PBMs publicly accountable for their decision-making.
“Iowans consistently raise concerns about the high prices they're paying for prescription drugs. Pharmacy benefit managers, which operate in the shadows between drug companies and insurance plans, use complex and opaque schemes to push up the prices of drugs for consumers. This bill shines a light on these practices and prioritizes patients over PBM profits,” Grassley said. “Large health industry corporations are squeezing Americans’ pocketbooks for medications they need, and Congress must tackle this issue from multiple directions.”
“Far too many Americans are forced to make the impossible decision of choosing between putting food on the table and paying for the medications that they need. This is unacceptable,” Carper said. “This bipartisan legislation will take a critical step toward rooting out the causes of high costs for life-saving medications. By holding Pharmacy Benefit Managers accountable and establishing much-needed oversight of their practices, we will bring American patients back to the forefront of our medical system.”
The PBM Oversight Act of 2023 adds pharmacy benefit managers (PBMs) to conflict-of-interest restrictions for certain pharmacy and therapeutics (P&T) committee members. This provision is consistent with a 2013 watchdog recommendation that has never been implemented. The legislation also directs the Government Accountability Office to report to Congress on how often PBMs override P&T committee recommendations for pricing and other formulary elements each calendar year.
PBMs act as middlemen between patients and pharmaceutical manufacturers to negotiate drug prices. These negotiations should yield cost-savings for patients by lowering premium rates or reducing copays. However, PBMs often profit from them, and patients receive few – if any – benefits in premiums or at the pharmacy counter.
The P&T committee is an advisory panel made up of pharmacists, physicians and various medical experts. Among other tasks, the P&T committee recommends drug formulary and utilization management for a senior’s drug plan. Sometimes PBMs will take its recommendations to the negotiating table; other times, they won’t. Grassley’s bipartisan insulin investigation further describes the role of P&T committees and how PBMs make formulary decisions.
Bill text is available HERE, and summary, HERE.
Grassley’s Work to Lower Prescription Drug Prices:
Grassley remains committed to getting his bipartisan PBM legislation, which includes the Prescription Pricing for the People Act and the PBM Transparency Act, across the finish line:
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