U.S. Senate panel OKs bill to rein in pharmacy benefit managers; Kentucky pharmacist applauds similar efforts by House members

By Melissa Patrick
Kentucky Health News

At least one Kentucky pharmacist is applauding the latest efforts to rein in pharmacy benefit managers.

PBMs are middlemen that negotiate drug prices with drug manufacturers and pharmacies. They also design prescription-drug benefits for health plans.

“Fortunately, lawmakers are hearing our concerns loud and clear,” Taylor Williams, a second-generation pharmacist from Hazard and an executive fellow with the Kentucky Pharmacists Association, wrote in an op-ed submitted to  Kentucky Health News and other publications.

“Congressman Brett Guthrie, chair of the Health Subcommittee on House Energy and Commerce, and Congressman James Comer, chair of the house Oversight Committee, are working hard to rein in PBMs’ profit-driven role in our healthcare system and ensure that patients can afford the prescriptions they rely on,” she wrote.

Williams submitted the op-ed on the same day the Senate Finance Committee advanced a bipartisan bill to change how PBMs interact with federal prescription-drug programs as a way to help lower costs.  It is called the Modernizing and Ensuring PBM Accountability Act.

The Hill reports, “While other committees have also passed PBM reform bills, the Finance Committee has jurisdiction over Medicare and Medicaid, which make up a large portion of U.S. health spending. Still, all the separate bills in the House and Senate will need to be combined into one floor-friendly package.”

Among other things, the Senate bill includes provisions that would delink PBMs’ compensation from drug prices, which would remove an incentive for PBMs to favor higher-priced drugs. It would also add new transparency and reporting requirements and ban spread pricing, in which a PBM keeps the difference between what it bills Medicaid for medications and what it pays the pharmacy to dispense the drug. Click here for a summary of the Act.

Kentucky lawmakers have been working on PBM issues for years, most recently passing 2020 Senate Bill 50 that among other things, prohibits spread pricing. A 2019 state analysis found PBMs made $123 million through spread pricing in Kentucky.

SB 50 also required the state to hire a single PBM to manage Kentucky Medicaid’s prescription-drug business of more than $1 billion a year. Kentucky has saved at least $38 million from this move.

This year, companion PBM bills were introduced in the state House and Senate, but neither got a hearing.

PBMs argue that they lower costs for consumers because they negotiate for lower drug costs and pass the savings onto to the insurance plans.

Williams said she recently met with Kentucky’s congressional delegation in Washington to share her concerns about PBMs and their impact on Kentucky’s independent pharmacies and the patients they serve.

“Our profession is facing serious challenges because of largely unknown middlemen in the drug pricing system called pharmacy benefit managers,” she wrote. “If we don’t do something about them soon, the local community pharmacies that people trust may become a thing of the past. . . . Without much needed reform, PBMs will continue to find new ways to increase their profit margins at the expense of patients, providers and taxpayers. Even worse, it could leave Kentuckians without a local, trusted health-care advisor as many community pharmacies will be forced to close their doors.”

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