Legislation recently introduced by Sens. Chuck Grassley (R-Iowa), ranking member of the Judiciary Committee, and Maria Cantwell (D-Wash.), chair of the Committee on Commerce, Science and Transportation, to improve transparency in prescription drug pricing was approved by the Commerce Committee with bipartisan support, 19-9. Their bill would direct the Federal Trade Commission (FTC) to hold pharmacy benefit managers (PBMs) accountable for unfair and deceptive practices – practices that often drive up the cost of prescription drugs at the expense of consumers.
“As the middlemen in the pharmaceutical supply chain, pharmacy benefit managers too often get away with undisclosed practices that increase their profits while driving up the cost of medicine for consumers,” Grassley said. “The Pharmacy Benefit Manager Transparency Act will direct the Federal Trade Commission to tackle these arbitrary, unfair and deceptive practices to cultivate transparency and accountability in the industry. I’m glad our legislation passed the Commerce Committee, and I’ll continue working with my colleagues to ensure it receives a vote on the Senate floor.”
Specifically, the Pharmacy Benefit Manager Transparency Act of 2022 would ban deceptive unfair pricing schemes, prohibit arbitrary claw backs of payments made to pharmacies and require PBMs to report to the FTC how much money they make through spread pricing and pharmacy fees.
Today, three PBMs control nearly 80 percent of the prescription drug market. They serve as middlemen, managing every aspect of the prescription drug benefits process for health insurance companies, self-insured employers, unions and government programs. They operate out of the view of regulators and consumers — setting prescription costs, deciding what drugs are covered by insurance plans and how they are dispensed – pocketing unknown sums that might otherwise be passed along as savings to consumers and undercutting local independent pharmacies. This lack of transparency makes it impossible to fully understand if and how PBMs might be manipulating the prescription drug market to increase profits and drive-up drug costs for consumers.
Grassley’s bipartisan proposal is supported by the National Community Pharmacists Association, Community Oncology Alliance, Biotechnology Innovation Organization, American Pharmacy Cooperative, Association of Mature American Citizens and American Pharmacists Association.