PBM Reform Legislation Advances in Senate and House Committees

September 25, 2023
Hall Benefits Law, LLC

Committees in both houses of Congress recently voted to advance legislation reforming pharmacy benefit managers (PBMs). In recent months, PBMs, which manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, and large employers, have come under fire for allegedly anticompetitive practices and inflated consumer drug prices.

The Senate Finance Committee, which handles matters related to Medicaid and Medicare, passed the Medicare PBM Accountability Act. The bill promotes increased transparency about how PBMs deliver and pay for prescription drugs. This transparency is seen as necessary because six PBMs control about 95% of the PBM market. According to Catherine Cortez Masto, D-Nev., who sponsored the bill, increased transparency measures, such as annual reports by PBMs to Medicare drug plans and disclosure of price negotiations and rebate information that affect premiums and co-pays will help Medicare drug plans select the PBMs that best serve their beneficiaries’ needs. The bill also would ban spread pricing, which occurs when PBMs bill Medicaid for more than they pay for prescription drugs. The goal of the bill is to decrease costs for seniors and taxpayers.

Meanwhile, the House Ways and Means Committee passed the Health Care Price Transparency Act of 2023, which required increased transparency by PBMs about drug claims and out-of-pocket expenses. The bill would require PBMs to provide a patient-specific transparency tool. It also would require PBMs to publicize machine-readable files for out-of-network rates, in-network rates, and drug prices. The bill’s purpose is to make it easier for small businesses and individuals to compare healthcare costs and more easily understand what benefits are available to them.

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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