PBM reform: Key Senate committee advances legislation targeting drug pricing practices
A Senate panel advanced four bills aimed at reforming pharmacy benefit manager practices and improving generic drug competition, one day after the senators heard input from major PBM and pharma executives.
Bipartisan legislation to reform pharmacy benefit manager practices and boost generic drug competition is one step closer to passage.
The Senate Health, Education, Labor and Pensions Committee on Thursday approved a package of four bills and a series of amendments just over a week after Chair Bernie Sanders (I-Vt.) postponed votes following criticism from Republicans who wanted more information about the potential impacts of a series of amendments offered by Democrats.
“We’re here to lower health care costs and improve access to the best possible care for fellow Americans, and the legislation we’re considering today to reform the rules that govern PBMs and generic drugs does that,” Sen. Bill Cassidy (R-La.), the committee’s top Republican, said in opening remarks at the markup.
The committee’s support of the bills, which include proposals to limit drug manufacturer use of the Food and Drug Administration’s citizen petition process and rare disease drug exclusivity to limit competition, marks a pivotal step in efforts to get a sweeping drug pricing package to the Senate floor. The most contentious part of the PBM bill is a provision that would prevent PBMs from deploying spread pricing models for their clients. In this model, a PBM would charge the insurer or plan sponsor more for a drug than it costs at the pharmacy and then pocket the difference.
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Sen. Mitt Romney, R-Utah, introduced an amendment that instead would allow PBMs to offer spread pricing models but require that they also provide an alternative, allowing plan sponsors to select what works for them and injecting additional transparency into negotiations. It also would implement new requirements designed to increase the transparency of PBM contracts and pricing practices, and mandate that PBMs pass 100% of the rebates collected from drug makers to health plans.
Drug manufacturers have characterized PBMs as the main source of high U.S. drug costs because of rebates and fees that PBMs collect from manufacturers. PBMs counter that their main mission is to provide discounts to patients and that manufacturer price setting and use of patents to restrict generic competition are fueling high drug costs for Americans.
Patients for Affordable Drugs Now praised the favorable votes on the drug pricing bills, which the group’s executive director, Merith Basey, called “a significant step toward restoring accountability to the U.S. drug price system so that it prioritizes patients rather than the bottom line of the pharma and PBM industries. We call on Senate Majority Leader (Chuck) Schumer to bring these bills to the floor for a vote as soon as possible.”
Lawmakers now must work on putting together drug pricing proposals from various committees in both chambers and an agreement on lowering what Americans pay for insulin. Schumer hopes to bring a health package to the floor in the next couple of months.