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Carter, Bipartisan Members Introduce Legislation Seeking Transparency for Drug Industry Middlemen

This week, Representatives Roger Marshall, MD (KS-01), Peter Welch (VT-At Large), Earl L. “Buddy” Carter (GA-01), and Vicente Gonzalez (TX-15), introduced H.R. 3223, the Pharmacy Benefit Manger Accountability Study Act of 2019.  This bipartisan legislation directs the Government Accountability Office (GAO) to conduct a study on the role pharmaceutical benefit managers (PBMs) play in the drug supply chain and serves as a companion to existing Senate efforts.

PBMs are third party administrators that were designed to negotiate and manage the drug benefit of a health plan.  They do this by negotiating with drug manufacturers, creating a list of covered drugs, and contracting with a network of pharmacies to accept the negotiated price and other reimbursement policies of the drug benefit.  Despite claiming to provide patients savings in their health plans, PBMs have done just the opposite in recent decades. Under the Medicare Part D program, for example, PBMs have been found to increase direct and indirect remuneration fees over the last several years, raising out-of-pocket costs for seniors and placing neighborhood pharmacies at financial risk.

This study would equip lawmakers with additional insight on the role of PBMs in the health care industry. Specifically, this bill would allow the GAO to investigate, for the first time, the impact of PBMs in the individual and small group market under the Affordable Care Act.  The GAO report will provide Congress with the information they need to take legislative action to lower the cost of prescription drugs for patients, improve the efficiency of the pharmaceutical supply chain, and provide transparency in pharmacy benefit management.

“Every time I talk to Kansans about their out of pocket costs for medicine, the conversation immediately goes to the root of the problem; the cost of health care,” said Rep. Marshall, MD.  “Up until a few years ago, no one was talking about PBMs, but Congress is finally investigating the middlemen in the drug supply chain.  For Congress to be effective, we need to understand what is broken, and I believe this legislation will provide additional insight on how PBMs can negatively impact my constituents.  The time for transparency has long passed.  We must pull back the veil on these shady policies and determine how much PBMs are keeping for themselves, so Congress can get to work returning it to patients across the country.”

“Seniors across the country are crying out for relief from skyrocketing drug prices,” said Rep. Welch.  “This bipartisan legislation will shed light on the opaque practices in the drug supply chain that drive up prices and give lawmakers the information they need to hold bad actors accountable.”

“The most significant and immediate impact we can have on prescription drug prices is inserting transparency into the health care supply chain,” said Rep Carter. “Right now, big business has wedged itself between patients and their health care in a dangerously opaque manner. The most egregious example of this is the middle man in the chain – the Pharmacy Benefit Managers. As the only pharmacist in Congress, I’m glad to join this bipartisan group to introduce this legislation today to help us further uncover what is happening to the costs of drugs before they reach the patient. Right now, medications leave the manufacturer at one price then skyrocket before they reach the pharmacy and the PBMs refuse to explain why. Patients deserve better, and we will continue working on this until prescription drugs are affordable and accessible for all Americans. As I always say, sunlight is the best disinfectant.”

“From day one, I promised South Texans I would take action to lower the price of prescription drugs and provide greater transparency in the drug supply chain,” said Rep. Gonzalez. “This bipartisan legislation will give us greater insight on how to more effectively conduct oversight and hold all major healthcare industry stakeholders accountable while lowering the prices of prescription drugs so no person is forced to choose between putting food on the table, paying their bills or buying necessary medications.”

Thankfully, state and local officials are also working to address this issue.  Just this week, the Massachusetts Health Policy Commission released an investigative report finding that PBMs reaped substantial profits at the expense of consumers, and in some cases, doubled the cost of drugs.