Senators Carper and Grassley Introduce Legislation to Hold Pharmacy Benefit Managers Accountable
Senators introduced the PBM Oversight Act of 2023 to increase transparency of Pharmacy Benefit Managers’ (PBM) practices and lower the cost of prescription drugs for Americans
Today, U.S. Senators Tom Carper (D-Del.) and Chuck Grassley (R-Iowa) introduced the PBM Oversight Act of 2023, bipartisan legislation that would establish the authority for Centers for Medicare and Medicaid Services (CMS) to oversee PBMs. The bill would provide much-needed oversight into the ways PBMs determine which medications are included on the list of covered drugs under a person’s health plan, also known as drug formularies. This legislation would also require the Government Accountability Office (GAO) to study this issue and report its findings to Congress, including the practices of Pharmacy & Therapeutics (P&T) Committees in the development of drug formularies under Medicare Part D.
PBMs have a documented history of not passing cost-savings on to patients. This legislation would increase oversight and hold PBMs publicly accountable for their decision-making practices for formulary medications and their respective prices.
“Far too many Americans are forced to make the impossible decision of choosing between putting food on the table and paying for the medications that they need. This is unacceptable,” said Senator Carper. “This bipartisan legislation will take a critical step toward rooting out the causes of high costs for life-saving medications. By holding Pharmacy Benefit Managers accountable and establishing much-needed oversight of their practices, we will bring American patients back to the forefront of our medical system.”
“Iowans consistently raise concerns about the high prices they’re paying for prescription drugs. Pharmacy Benefit Managers, which operate in the shadows between drug companies and insurance plans, use complex and opaque schemes to push up the prices of drugs for consumers. This bill shines a light on these practices and prioritizes patients over PBM profits,” said Senator Grassley. “Large health industry corporations are squeezing Americans’ pocketbooks for medications they need, and Congress must tackle this issue from multiple directions.”
PBMs perform a variety of services for health plans or payers, including negotiating drug prices with pharmaceutical manufacturers; developing prescription drug formularies; contracting with pharmacies that agree to dispense drugs for established reimbursement rates; and operating their own mail-order and specialty drug pharmacies. The negotiations that occur between PBMs and manufacturers when determining drug pricing are intended to create cost-savings for the patient through lower premium rates or reduced copays. Instead, PBMs have profited from the method in which these negotiations occur, and patients have realized few benefits in premiums or at the counter.
Senator Carper has been laser-focused on lowering health care costs and increasing industry transparency. He has prioritized combating the role of PBMs in driving up the cost of medication through legislation like the Insulin Price Reduction Act, which would hold PBMs, big pharmaceutical companies, and insurers accountable for surging prices by incentivizing reductions in list prices. Senator Carper has also cosponsored legislation to require PBMs to disclose and provide information on the rebates negotiated with the drug manufacturers. At a recent hearing in the Senate Finance Committee, he highlighted how transparency in the health care industry can drive better outcomes for patients.