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Senate Finance Committee targets PBM reform in new legislation

The bill would introduce more transparency and regulation to PBMs, and pharmacies would be required to report costs for medications.

Jeff Lagasse, Associate Editor

Photo: Malorny/Getty Images

In a unanimous 26-0 vote, the Senate Finance Committee passed a comprehensive draft package this week that puts pharmacy benefit manager reform and mental health in the spotlight.

The Better Mental Health Care, Lower-Cost Drugs, and Extenders Act would introduce more transparency and regulation to PBMs, and pharmacies would be required to report costs for medications. The act would essentially be paired with provisions in the Modernizing and Ensuring PBM Accountability Act (MEPA), which passed earlier this year.

According to the committee, the legislation expands mental health care and substance use disorder services under Medicaid and Medicare, reduces prescription drug costs for seniors at the pharmacy counter, extends Medicaid and Medicare provisions that will expire this year, and increases Medicare payments to support physicians and other providers.

Senate Finance Committee Chair Ron Wyden, D-Ore., said in a that the goal of the Act is to "rein in the shadowy tactics by pharmacy benefit managers that hurt community pharmacies and drive up prescription drug costs for seniors and taxpayers."

Ranking Member Mike Crapo, R-Idaho, maintained the 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."

WHAT'S THE IMPACT?

One of the main proposals in the draft is to eliminate the $8 billion in cuts to hospitals through the Medicaid disproportionate share hospital payments. This, according to a committee of the legislation, would save providers about $16 billion over the next couple of years.

The draft also proposes to decrease physician reimbursements by 1.25%, a smaller cut than originally proposed.

Elsewhere, the legislation proposes to expand the number of mental health professionals practicing under Medicare in rural areas, require Medicare Advantage plans to keep accurate provider directories, and bolster access to mental and telemental health for children in Medicaid and the Children's Health Insurance Program (CHIP).

The bill received from the American Hospital Association, which came out in favor of the legislation's various provisions.

"The bill reflects the thoughtful, bipartisan work of the Committee over the past year to address numerous issues of importance to the hospital field," the group wrote. "The AHA is pleased to support several provisions in the bill to improve access to behavioral healthcare and delay Medicaid disproportionate share hospital (DSH) reductions."

BPC Action, part of the Bipartisan Policy Center, also of the bill.

"The Bipartisan Policy Center has long been working on developing policy solutions to improve the federal effort to tackle the nation's behavioral health and substance use crises," the organization said in a statement. "BPC Action is particularly pleased that the legislation being considered includes several bipartisan priorities."

The Biosimilars Forum was with provisions in the bill that address the biosimilars market, saying in a statement that the policies "promote uptake, access, and availability of lower-cost biosimilars within the Medicare Part D program. Increased access to biosimilars for Medicare patients is a win for everyone. Biosimilars are a commonsense bipartisan solution to skyrocketing prescription drug costs, and the Forum is looking forward to bringing the cost-savings promise of these treatments to reality."

The committee's discussion draft, according to the Forum, promotes the use of effective, lower-cost biosimilars through provisions requiring Part D plans to offer biosimilars to Medicare beneficiaries 鈥 an effort the group expects will directly lead to lower costs for patients. The draft also stipulates that, on an annual basis, the Centers for Medicare and Medicaid Services will release a list of biosimilars that qualify as high-discount biosimilars for particular reference products.

"This ongoing, midyear access for biosimilars will benefit patients by making lower-cost treatments more readily available," the organization said.

THE LARGER TREND

In July, the Federal Trade Commission voted to rescind its prior statements of advocacy for pharmacy benefit managers, effectively ending the agency's previously stated endorsement of PBMs.

According to the FTC, the new statement pulling its advocacy is a response to PBMs' continued reliance on older FTC advocacy materials that opposed mandatory PBM transparency and disclosure requirements.

A year ago, after the FTC first announced its study into PBM practices, a number of pharmaceutical groups came out in favor of the inquiry. The American Pharmacy Cooperative approved of the FTC's move, saying it had long advocated for federal oversight of PBMs.

In September, PhRMA released Nephron Research that contends PBMs are driving up profits and drug prices through fees. PBMs demand double the amount of fees today than they did five years ago, according to the report.

Twitter: @JELagasse
Email the writer:听Jeff.Lagasse@himssmedia.com