Congress is seeking to develop and pass legislation that would reform the way pharmacy benefit managers (PBMs) operate. If one of the current iterations pass, the new rules could be in effect as early as the 2026 plan year. A presentation at AMCP Nexus 2023 reviewed the various proposals currently being considered. The speaker also offered advice for PBMs and plan sponsors seeking to prepare for the pending changes.
A Kaiser Family Foundation poll conducted earlier this year indicates that 82% Americans believe that the cost of prescription drugs is “unreasonable,” and 73% Americans want more government regulation limiting prescription drug prices, said Melissa Andel, MPP, principal at CommonHealth Solutions, LLC. This general sentiment places a magnifying glass on PBMs, which Ms. Andel defined as “entities that act as price negotiators or group purchasers on behalf of plan sponsors; process claims and payment; perform drug utilization review; process prior authorization requests; adjudicate appeals or grievances related to prescription drug benefits; contract with network pharmacies; or control the cost of covered drugs.” She also added a caution: “Any person or entity that carries out one or more of these activities is considered a PBM, whether the person or entity calls itself a PBM.”
There is general bipartisan support for PBM reform, she said, and the Senate Finance Committee, Commerce Committee, and HELP Committee as well as the U.S. House of Representatives are all working on versions. Many of the proposals consider similar issues, such as spread pricing, rebates, renumeration, generics and biosimilars, and transparency regarding prices and costs, but there are significant differences among the proposals.
Ms. Andel advised attendees that any legislation that ultimately passes likely will not greatly affect rebates, spread pricing, or renumeration. However, she predicts that legislation is likely to affect disclosure, particularly regarding ownership. Both the House and Senate bills would require PBMs to disclose quite a bit of information to plan sponsors and the federal government on an annual or semi-annual basis.
“Congress is clearly concerned about the impact that [consolidation and] common ownership has on PBM financial relationships,” she said. “These types of [disclosures] can serve as the foundation for continued oversight and legislation from Congress of the PBM industry.”
She recommended that PBMs review their business models and agreements in advance of potential disclosure requirements and prepare for potential changes in how fees can be assessed. For plan sponsors, she advised that they brainstorm ways to capitalize on increased transparency and consider plan designs that balance spending with access.
Andel M, Reeder G. PBM and Health Care Reform Legislation. Session L2. Presented at AMCP Nexus 2023; Oct. 16‒19, 2023; Orlando, Fla.