PBM reform is on, as Senate advances new bill that forces pharmacies to report costs

In a rare unanimous, bipartisan vote, the Senate Finance Committee on Wednesday passed a bill that would rein in pharmacy benefit managers – and create a list of discounted drugs with high rebates in Medicare Part D, as well as address several other health-care issues.

The long name of the legislation indicates the wide range of provisions that are included.

The Better Mental Health Care, Lower-Cost Drugs and Extenders Act, when combined with provisions from the Modernizing and Ensuring PBM Accountability Act passed earlier this year, would introduce more transparency and regulation to PBMs.

However, PBMs are pushing back on the proposed changes. In a statement released ahead of the vote, the Pharmaceutical Care Management Association said the proposed legislation would add uncertainty to Medicare Part D plans.

“Given that the impact of the many Inflation Reduction Act’s changes to Part D is still unknown, we urge the committee and Congress to wait before imposing additional, untested new proposals, including the so-called ‘delinking’ provision marked up in July, which on its own could destabilize the Part D program for beneficiaries and health plans, both of which voluntarily participate in the program,” the group said.

Among other key provisions of the bill:

• The statutory increase of 1.25% for Medicare physician fee schedule services in 2024 would increase to 2.5% .This would amount to reducing the 4% cut in the conversion factorto 2.15%, thereby slightly increasing the physician payment rate.
• Eligibility for bonuses under the Health Professional Shortage Area program would be extended to certain mental health and substance use disorder services provided by non-physician health-care professionals.
• The HHS secretary would be required to provide information on licensing requirements for furnishing telehealth services under Medicare and Medicaid, including guidance on clinicians who are providing care by telehealth to patients in neighboring states.
• Each network-based Medicare Advantage plan would need to verify provider directory information at least every 90 days.
• Beginning in 2028, a Medicare Part D plan sponsor offering preferred pharmacy networks would be required to contract with at least 80% of essential retail pharmacies in the plan’s service area that are independent community pharmacies, and 50% of essential retail pharmacies in the plan’s service area that are not independent community pharmacies.
• Another provision would require that Part D plans base enrollee drug copays on the drug’s net price — including projected manufacturer rebates — rather than their Part D negotiated price.

Related: Will new Senate bill curb the power of the PBMs – and drive down drug costs?

“This comprehensive legislation will reduce out-of-pocket medication costs for seniors, enhance accountability in our federal health-care programs, improve access to high-quality mental health services and extend critical support for clinicians and suppliers,” said Sen. Mike Crapo, R-Idaho, the committee’s ranking member.