In a bipartisan effort, lawmakers have introduced a new bill aimed at addressing the controversial business practices of drug supply chain middlemen. These middlemen, known as pharmacy benefit managers (PBMs), are often accused of inflating prescription medication prices, harming U.S. patients and pharmacies, and driving up healthcare costs.
The newly introduced “Pharmacists Fight Back Act” is designed to ensure that community pharmacies can provide care to patients enrolled in federal health-care programs while being reimbursed “fairly and transparently” by PBMs. The bill, unveiled by Reps. Jake Auchincloss, D-Mass., and Rep. Diana Harshbarger, R-Tenn., aims at lowering health-care costs for seniors covered by Medicare and Medicaid, government employees, active duty service members, and other patients. It also intends to give patients more freedom to choose which pharmacy to get their prescriptions from.
Challenging Middlemen’s Practices
The bill is part of a larger effort to address the practices of PBMs, which negotiate rebates with drug manufacturers on behalf of insurers, large employers, and federal health plans. These middlemen create lists of medications, known as formularies, that are covered by insurance and reimburse pharmacies for prescriptions. However, lawmakers and drugmakers argue that PBMs overcharge the plans they negotiate rebates for, underpay pharmacies, and fail to pass on savings to patients.
Legislation targeting PBMs has gained bipartisan support in both the House and Senate, with one proposal passing the House in December. However, the legislative momentum has stalled, and PBM reform was left out of a recent government spending package. The Biden administration has increased pressure on PBMs, with the Federal Trade Commission planning to sue major players in the industry.
The “Pharmacists Fight Back Act” seeks to increase transparency around PBM business practices and ban spread pricing, a practice in which plans are charged more than what pharmacies are paid for a drug. The bill also focuses on pharmacies, aiming to address the challenges faced by pharmacists as small business owners and healthcare providers.
One of the key provisions 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 purchasing medications, particularly generic drugs. The current reimbursement system, involving multiple layers of insurers, manufacturers, PBMs, and pharmacies, often leads to ambiguity and confusion regarding fees and markups.
In addition to the new reimbursement model, the bill includes several other provisions aimed at protecting patients and independent pharmacies. It requires PBMs to share 80% of rebates with patients and prohibits practices such as steering patients to PBM-affiliated pharmacies and excluding in-network pharmacies from filling prescriptions. Rep. Harshbarger emphasized that the bill will put in place much-needed reforms to stop the gouging of independent pharmacies, make life-saving drugs more affordable for patients, and ultimately yield savings to taxpayers.
The “Pharmacists Fight Back Act” represents a significant step towards reforming the practices of drug supply chain middlemen and ensuring fair treatment for patients, pharmacies, and healthcare providers. Through increased transparency, a new reimbursement model, and protective measures for patients and pharmacies, this legislation aims to address the challenges and issues in the current pharmaceutical landscape.