Bipartisan Pharmacy Benefit Manager Reform Bill Heads to Senate

June 14, 2023
Hall Benefits Law, LLC

The Senate Committee on Commerce, Science, and Transportation has approved the Pharmacy Benefit Manager Transparency Act (S.1339). The bill now heads to the full Senate for a vote.

The bill aims to stop deceptive and anticompetitive pricing schemes by pharmacy benefit managers (PBMs). Currently, three PBMs control 80% of the prescription drug market, and these intermediaries in the drug supply pricing chain operate with little or no regulation by the government. The practices by PBMs increase the prices of prescription drugs for consumers and restrict the drugs that health plans cover.

The bill includes the following provisions:

  • Eliminating “spread pricing,” in which PBMs charge health plans and payers more for drugs than what they reimburse pharmacies;
  • Prohibiting PBMs from clawing back payments to pharmacies, increasing fees, or lowering reimbursements to offset reimbursement charges in federally funded health plans; and
  • Requiring PBMs to pass on all rebates to the plan or payer and fully disclose the cost and reimbursement of drugs to the plan.

According to an estimate by the Congressional Budget Office, passage of the bill would reduce the budget deficit by $740 million over the next decade.

The Senate Committee passed the same bill last year, but it failed to reach a vote before the full Senate. Many healthcare and consumer organizations support the bill, as do pharmaceutical companies. The Pharmaceutical Care Management Association (PCMA), representing PBMs, decries the bill for its potential to remove the flexibility and range of choices currently available in the Marketplace. The PCMA instead maintains that Congress should hold big pharmaceutical companies accountable for abuses of the drug patent system, which blocks competition and keeps drug prices high for consumers.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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