U.S. House Committee Passes Spanberger’s Bipartisan Legislation to Hold Prescription Drug Intermediaries Accountable & Tackle Skyrocketing Costs

Apr 09, 2019
Healthcare
Press

The Bipartisan Bill Would Increase Transparency in Negotiations Between Pharmacy Benefit Managers and Drug Manufacturers, Health Insurers, and Pharmacies

WASHINGTON, D.C. — U.S. Representative Abigail Spanberger’s bipartisan legislation to help tackle the rising cost of prescription drugs today passed unanimously out of a key U.S. House Committee.

Spanberger’s legislation—which passed on a bipartisan vote out of the House Ways and Means Committee—would require increased transparency of third-party intermediaries for drug discount negotiations. Spanberger led the introduction of the bipartisan bill alongside U.S. Representatives Jodey Arrington (R-TX-19) and Brendan Boyle (D-PA-02).

There are significant concerns that the practice of using pharmacy benefit managers (PBMs) as intermediaries between drug manufacturers, health insurers, and pharmacies is contributing to the escalating list prices of prescription drugs and the resulting increased out-of-pocket costs for U.S. patients. Without transparency into PBMs’ practices, neither patients nor doctors can know the impact and cost of PBMs’ involvement.

Spanberger’s 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 market transparency would help patients, doctors, employers, and other buyers better understand and compare the discounts PBMs receive.

“In Central Virginia and across the country, Americans are paying increasingly higher prices for lifesaving medication—and it is a crisis for families and patients, especially those living with chronic illness and the elderly. I was proud to introduce this bipartisan bill meant to address one of the root causes of this crisis and to increase transparency within the murky world of prescription drug negotiation,” said Spanberger. “By requiring that PBMs report their rebates, discounts, and price concessions, we are casting sunlight on a system that has significantly contributed to rising drug prices—and we’re giving patients, physicians, and employers the opportunity to understand how they are impacted by PBMs. With today’s passage of our bill out of committee, we are making significant progress—and I’ll keep fighting to lower drug prices and bring transparency system that hurts chronically ill and aging Americans.”

Currently, the three largest PBMs control nearly three-quarters of the U.S. prescription drug market—and these powerful third-parties 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 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.

Spanberger’s legislation was included as one of four bills in a bipartisan package intended to address the prescription drug price crisis. All four bills were approved by the House Ways and Means Committee.

Background

Since arriving in the U.S. House, Spanberger has been fighting to address the prescription drug affordability crisis in Central Virginia. In January, she helped introduce the Medicare Negotiation and Competitive Licensing Act, which would authorize HHS to negotiate directly with pharmaceutical providers within Medicare Part D to help lower costs.

And last month, Spanberger helped introduce and pass landmark campaign finance and ethics reform legislation that would strengthen transparency in the U.S. political system and limit the influence of special interests—including pharmaceutical companies. During a press conference prior to the passage of the legislation, she shared the story of Central Virginians concerned about rising prescription drug prices—and she stressed why increased transparency would restore faith in the democratic process and the ability of Members of Congress to affect change on these issues. Click here to watch the full press conference.

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