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House panel passes PBM bill that bans spread pricing, only allows a flat service fee

The Delinking Revenue from Unfair Gouging (DRUG) Act would require pharmacy benefit managers that contract with a carrier offering federal health benefits plans to “de-link” the fees they charge insurers from the price of drugs.  


A House panel last week advanced a bipartisan bill that would ban pharmacy benefit managers from charging fees based on drug list prices. The House Committee on Oversight and Accountability voted 29-11 to approve the so-called Delinking Revenue from Unfair Gouging (DRUG) Act.


“Rarely a day goes by that I don’t hear from constituents concerned about the high cost of prescription drugs,” committee Chair James Comer, R-Ky., said. “I am pleased the committee is considering such important legislation to reign in these PBMs and curb these abusive practices.”


The bill, which was introduced by Rep. Mariannette Miller-Meeks, R-Iowa, would allow PBMs to charge only a flat service fee that is separated from list prices. The bill also would ban spread pricing in which PBMs charge insurers more than they pay pharmacies and prohibit PBMs from steering patients to pharmacies with which they are affiliated. These changes would apply only to health insurance for federal employees. The Federal Employees Health Benefits program covers more than eight million of the nearly 160 million Americans who receive health insurance from their employer.


The National Association of Manufacturers expressed support tor the legislation.


PBMs increase the price that health plan participants pay for medicines,” said Charles Crain, vice president of domestic policy. “By applying upward pressure to list prices that dictate what patients pay at the pharmacy counter, pocketing manufacturer rebates and failing to provide an appropriate level of transparency about their business models, PBMs increase health-care costs at the expense of manufacturers and manufacturing workers.”


However, PBMs counter that delinking compensation from drug prices would remove incentives to lower prices for consumers. It also would prevent them from negotiating more forcefully against manufacturers and pharmacies, because compensation would not be tied to the ability to drive down prices. This means they would be paid the same regardless of what happens, one PBM executive told Axios.


Nine Democrats, including ranking member Rep. Jamie Raskin of Maryland, voted against the bill. Two Republicans, Rep. Eric Burlison of Missouri and Paul Gosar of Arizona, also voted no. The Senate passed its own version of a delinking bill targeting Medicare Part D last summer.


Reporter: Alan Goforth

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