The hearing will discuss the role of PBMs in healthcare and the Pharmacy Benefit Manager Transparency Act, legislation that has been submitted by Sens. Maria Cantwell and Chuck Grassley.
U.S. Sen. Maria Cantwell (D-Wash.), chair of the Senate Committee on Commerce, Science and Transportation, will hold a committee hearing on Thursday, Feb. 16, 2023, at 10 am to discuss the role PBMs have in healthcare. The hearing will also address how the Pharmacy Benefit Manager Transparency Act can bring transparency into PBM business practices.
Scheduled to appear at the hearing are:
Last month, Cantwell and Sen. Chuck Grassley (R-Iowa), ranking member of the Judiciary Committee, reintroduced two legislative bills that aim to bring transparency to the PBM industry. The Pharmacy Benefit Manager Transparency Act of 2023 (S.127) would make it illegal for PBMs to engage in “spread pricing” in which they charge health plans and payers more for a prescription drug than what they reimburse to the pharmacy.
The bill would also prohibit PBMs from clawing back payments made to pharmacies, or increasing fees or lowering reimbursements to offset reimbursement changes in federally-funded health plans. The bill would also PBMs to pass 100% of any rebate to the plan or payer. PBMS would be required to disclose the cost and reimbursement of drugs to the health plan, any fees or discounts the PBM charges.
PBMs would also have to file an annual report with the Federal Trade Commission with information on the difference between how much the plan paid the PBM for prescription and how much the PBM paid the pharmacy; the aggregate amount of fees PBMs charge pharmacies and total amount clawed back from pharmacies; and why cost or copay/coinsurance rates increased and why reimbursement rate to pharmacies decreased, as well as formulary design practices.
The bill also directs the General Accounting Office to report on the role that PBMs play in the pharmaceutical supply chain, the state of competition, the use of rebates and the amount passed on to patients and payers, how PBMs structure their formularies and the use of prior authorization and step therapy.
Both senators were also among the sponsors of the Prescription Pricing for the People Act of 2023 (S. 113), directs the FTC to examine the effects of consolidation in the PBM industry on pricing. The senators want to know whether PBMs steer patients to pharmacies they own, use formulary designs to favor drugs with rebates over lower cost options, or charge certain payers a higher price. The bill instructs the FTC to provide policy recommendations to Congress to improve competition and protect consumers