Lawmakers Crackdown on Pharmacy Benefit Managers: The Kiplinger Letter
A crackdown on pharmacy benefit managers on drug costs might help Congress forget their differences.
To help you understand what's happening in health legislation and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
At least one issue may overcome Congress’s current political dysfunction, a crackdown on pharmacy benefit managers (PBMs). In the House, lawmakers have already consolidated several related measures into a single piece of legislation, which will be among the first to receive a floor vote once the chamber acts on a plan to keep the government funded.
In the Senate, Majority Leader Chuck Schumer (D-NY) is expected to include the three major PBM-related bills that have emerged from committee in a broader healthcare package that is still to be worked out.
All the legislation includes transparency measures requiring PBMs to reveal how much they pay for various drugs, how much money they keep for themselves, and what costs/savings are passed along to insurers and patients. Greater oversight will likely help plan sponsors make better-informed decisions about contracts, leading to more competition between pharmacy benefit managers and lowering prescription drug costs overall.
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The legislation would also require the Government Accountability Office (GAO) to submit a report on the practices of pharmacy networks of group health plans, including networks that have pharmacies under common ownership with group health plans.
New restrictions on spread pricing are also certain, at this point. Spread pricing is when PBMs charge insurers more for a drug than they paid for it and keep the “spread” as profit. If they can’t stop passage, look for PBMs to lobby for looser requirements.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
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