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Passing and implementing a Senate pharmacy benefit manager bill as written could cost the PBMs billions of dollars in revenue per year, according to a new analysis from the Congressional Budget Office.
The Pharmacy Benefit Manager Reform Act bill was introduced by Sen. Bernie Sanders, a Vermont independent who caucuses with the Democrats. Sanders lined up support from three Republican cosponsors.
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The bill would require a PBM to give a health plan an annual statement showing what prescription drugs the plan covered and how much the plan really paid for the drugs, after taking rebates and other discounts into account.
The bill would also ban "spread pricing." When a PBM uses spread pricing, it charges the health plan one price for a drug, pays the pharmacy that dispenses the drug a lower price, and keeps the difference.
The spread pricing provision could cut net retail drug costs by about 0.5% for all employment-based health plans, the CBO analysts predicted.
Related: Are U.S prescription drug prices really '10 times those of other nations'?
The value of a ban on spread pricing and a requirement that PBMs pass all drugmaker and drug wholesaler discounts on to their health plan customers would probably average more than $7 billion per year in each of the first five years that the mandates were in effect, CBO analysts predicted.
U.S. PBMs now generate about $500 billion in revenue per year, according to IBISWorld.
If the CBO prediction is correct, the mandates would eliminate about 1.4% of the PBMs' current revenue stream.
PBMs would probably find ways to make up for the lost labor, but federal law does not let the CBO include predictions about new revenue streams in legislation impact analyses.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
