U.S. House Passes Spanberger’s Bipartisan Bill to Bring Increased Transparency to Prescription Drug Negotiations, Help Lower Drug Costs for Patients
In 2016, Pharmacy Benefit Managers Raked-In an Estimated $22.6 billion in Gross Profits, as Consumer Drug Costs Continued to Soar
Washington, October 28, 2019
WASHINGTON, D.C. – The U.S. House of Representatives today voted 403 to zero to pass U.S. Representative Abigail Spanberger’s bipartisan bill to help tackle the prescription drug affordability crisis and bring greater transparency to prescription drug negotiations.
Currently, there are concerns that the practice of using pharmacy benefit managers (PBMs) as intermediaries between drug manufacturers, health insurers, and pharmacies is contributing to rising list prices of prescription drugs and increasing out-of-pocket costs for American patients. Without transparency into PBMs’ practices, neither patients, pharmacists, nor doctors can understand the full impact and resulting costs of PBMs’ involvement.
The Spanberger-led Public Disclosure of Drug Discounts Act would require PBMs to report their aggregate rebates, discounts, and other price concessions for prescription drugs to a public website. This increased market transparency would help patients, doctors, employers, and other buyers better understand and compare the discounts PBMs receive from drug manufacturers. Spanberger introduced the legislation earlier this year alongside U.S. Representatives Jodey Arrington (R-TX-19) and Brendan Boyle (D-PA-02). The bipartisan bill is also cosponsored by U.S. Representatives Jeff Van Drew (D-NJ-02), Elissa Slotkin (D-MI-08), and Van Taylor (R-TX-03).
“Across Central Virginia, I have heard heartbreaking stories about the harmful financial effects of rising prescription drug costs. As prices surge, our neighbors struggle not only to purchase the medications they need, but also to understand why costs continue to rise. One of the first steps toward fixing this issue is to strengthen accountability within our murky discount and rebate system—a concern expressed to me by patients and pharmacists at our Henrico prescription drug roundtable in August,” said Spanberger. “Today marks important progress as we work to bring greater transparency to the black box of prescription drug negotiations. By shedding light on the practices of PBMs, our bipartisan legislation would allow patients, physicians, and pharmacists to better understand the economic impacts of decisions made by PBMs. At a time when PBMs are raking in record profits, we need to make sure we have public information on-hand that can help us hold them accountable for potentially passing on price increases to America’s families and seniors. I’d like to thank my colleagues in the House for moving our bill forward—and I’ll keep working to advance bipartisan legislation that can lower costs, increase access to lifesaving medications, and stimulate competition in the pharmaceutical industry.”
“One of the reasons why prescription drug costs are out of control is because negotiations between Pharmaceutical Benefit Managers (PBMs) and drug manufacturers are shrouded in secrecy,” said Arrington. “This legislation brings this process out of the dark and into the sunshine, providing patients with more transparency so they know exactly what they are paying for each time they visit their pharmacy. I’m also pleased that this legislation includes my bill, the Shop Rx Act, which empowers seniors with the information they need to choose the treatment options that best fit their needs and their budgets.”
“With the passing of the Public Disclosures of Drug Discounts Act, we continue to combat the growing issue of rising drug prices. By increasing market transparency and accountability for pharmacy benefit managers (PBMs), we provide a new insight into the full impact of PBMs’ involvement in drug price negotiations—giving power back to everyday people,” said Boyle. “I’m proud to have introduced this legislation with my colleagues and I will continue to work with them to address rising drug prices so that every American can access the quality care they need.”
Earlier today, Spanberger spoke on the floor of the U.S. House to call on her colleagues to support and pass her bipartisan bill. Click here to watch the full video of her remarks.
In 2016, PBMs saw an estimated $22.6 billion in gross profits, and right now, the three largest PBMs in the United States—Express Scripts, CVS Caremark, and Optum Rx—control nearly three-quarters of the U.S. prescription drug supply chain. These powerful players are responsible for negotiating rebates with manufacturers for Medicare Part D plans and other insurers. Medicare Part D plans provide beneficiaries with insurance coverage for prescription drugs, but the negotiations surrounding these drugs and their list prices are not transparent.
Specifically, the bipartisan Public Disclosure of Drug Discounts Act would increase transparency by requiring the U.S. Secretary of Health and Human Services (HHS) to publicly post aggregate rebate data and generic dispensing rates—data PBMs already report by law. Information on rebates by class of drug would be made publicly available, so long as the disclosure does not display confidential information regarding rebates achieved for an individual drug.
The Public Disclosure of Drug Discounts Act passed out of the House Ways and Means Committee in April 2019, and the bill passed out of the House Energy and Commerce Committee in July 2019.
Spanberger’s Public Disclosure of Drug Discounts Act is endorsed by the Blue Dog Coalition and the National Community Pharmacists Association (NCPA).
“NCPA supports passage of the Public Disclosure of Drug Discounts Act to bring further transparency to PBMs and the games they play with drug rebates, which can include steering patients to more expensive drugs or using retroactive pharmacy DIR fees to accelerate Medicare Part D beneficiaries into the coverage gap and catastrophic phase at the expense of taxpayers and to the detriment of small business community pharmacies,” said Karry K. La Violette, Senior Vice President of Government Affairs & Director of the Advocacy Center, National Community Pharmacists Association. “NCPA thanks the Chairmen and Ranking Members, as well as the bill’s sponsors, Reps. Abigail Spanberger, Jodey Arrington, and Brendan Boyle, for your leadership in addressing this issue, and we look forward to working with you to advance this legislation.”
In August 2019, Spanberger held a prescription drug roundtable in Henrico County with local families, patients providers, and families to focus on the challenges caused by overpriced prescription drugs. During the discussion, she heard concerns from patients and pharmacists about the influence of PBMs on the prescription drug marketplace.
Spanberger’s effort to hold PBMs accountable builds on her work in the U.S. House to address the prescription drug affordability crisis, spur competition in the prescription drug industry, and increase transparency in drug pricing, including: