A bipartisan coalition led by U.S. Sens. Mark Warner (D-VA), Peter Welch (D-VT), Roger Marshall (R-KS) and Bill Cassidy (R-LA) introduced legislation this week to limit abusive pricing practices by pharmacy benefit managers (PBMs).
The Protecting Pharmacies in Medicaid Act would crack down on the use of “spread pricing that charges Medicaid more than PMs pay pharmacies for a drug. Officials said such practices drive up costs for Medicaid and short-changes pharmacies that are struggling to stay in business. The senators estimate the bill would save Medicaid $2 billion over the next decade.
“Independent pharmacies deliver critical health care, including providing life-saving prescriptions, to patients all across the Commonwealth. Unfortunately, for too long, PBMs have engaged in shady tactics to line their own pockets at the expense of these small businesses and sick seniors,” Warner said. “That’s why I’m proud to introduce the Protecting Pharmacies in Medicaid Act, legislation that will put an end to the abusive practice of spread pricing and bring down costs for patients and our local pharmacies.”
The legislation will require Medicaid’s payments to PBMs to be passed directly on to pharmacies, excluding administrative fees. The bill would also require all pharmacies participating in state Medicaid programs to report National Average Drug Acquisition Costs to increase transparency in drug pricing and to ensure reimbursements reflect the true cost of prescription drugs.
The bill is endorsed by the Food Industry Association (FMI), National Association of Specialty Pharmacy, National Association of Chain Drug Stores, and the National Community Pharmacist Association.
“These are among the PBM reforms needed right away by Americans and their pharmacies. These also are among the reforms backed overwhelmingly in the Congress on a bipartisan basis. Every day that PBM reform is delayed is another day that Americans pay inflated drug prices, that care gets more remote for people and for communities, and that pharmacies are forced out of business,” Steven C. Anderson, President and CEO, National Association of Chain Drug Stores, said.