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The bipartisan bill introduced in the Senate in May would require PBMs to report to the FTC how much money they make through spread pricing and pharmacy fees.
More than 200 organizations expressed their strong support for the Pharmacy Benefit Manager Transparency Act (S. 4293), while an organization representing PBMs opposes the proposed legislation.
In the stakeholder letter, the groups urged Sens. Chuck Schumer (D-N.Y.) and Mitch McConnell (R-Ky.) to quickly bring the Act to a vote in the full Senate. The bill, which was introduced in late May 2022 by Sens. Maria Cantwell (D-Wash.) and Chuck Grassley (R-Iowa), passed the Senate Committee on Commerce, Science, and Transportation in June 2022.
The diverse group of organizations and businesses supporting the legislation include: The AIDS Healthcare Foundation, the National Community Pharmacists Association, the American Pharmacists Association, FMI-The Food Industry Association, Food Lion, Hannaford, and the Coalition of State Rheumatology Associations.
The legislation “would bring needed transparency to and ultimately stop PBM-insurers’unjust and deceptive practices, especially as the three largest PBM-insurers now control at least 80% of the market,” the organizations wrote. “We hope the full Senate will soon take up this legislation to empower the FTC [Federal Trade Commission] to bring enforcement actions against the consolidated PBM-insurer industry and their anticompetitive practices, including spread pricing and clawbacks.”
The Act empowers the FTC to increase drug pricing transparency and ban “deceptive unfair pricing schemes like spread pricing and prohibit arbitrary clawbacks of payments made to pharmacies,” NCPA said in a statement.
It also includes provisions to allow other state officials to bring action to enforce the law if the state attorney general lacks jurisdiction to do so, and allow for a Government Accountability Office study of PBM practices.
Of every $100 in spending on drugs sold in retail pharmacies, about $41 goes to intermediaries in the supply chain such as PBMs, according to research from the USC Leonard D. Schaeffer Center for Health Policy and Economics.
But the Act will not reduce prescription drug costs, said JC Scott, president and CEO of the PBM industry association, Pharmaceutical Care Management Association (PCMA), in a statement. “Instead, the legislation is designed to award pharmacies and drug manufacturers an increase to their bottom lines, rather than lowering prescription drug costs for consumers,” he said.
The bill hinders the ability of PBMs to drive competition in the prescription drug marketplace and enables drug manufacturers to “tacitly collude to raise prices even higher,” Scott said.