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AIPC Rx

Senate bill aims to crack down on how drug company ‘middlemen’ negotiate prices


It’s something many people have likely never heard of, but they play a big role in how much money you pay for prescription drugs.


They’re called Pharmacy Benefit Managers, also known as PBMs.


PBMs negotiate and manage drug benefits on behalf of health insurers.


Critics argue their practices are leading to higher drug costs for consumers.

Now a bipartisan bill in the Senate co-sponsored by Sen. Maria Cantwell (D-WA) and Sen. Chuck Grassley (R-IA) aims to crack down on alleged unfair practices by PBMs.


“We are looking at the mysterious middlemen in this,” said Cantwell during a Senate hearing about the proposal. “The systematic interference by PBMs in the drug supply chain is picking the pockets of independent pharmacies and driving up consumer costs.”


“Imagine a world where a cheaper product, yet equally effective, has a harder time selling,” said Grassley. “That’s the prescription drug industry.”


The Pharmacy Benefit Manager Transparency Act of 2023 would make it illegal for PBMs to take part in what’s known as spread pricing, according to the lawmakers behind the bill.


Spread pricing is when a PBM charges health plans more for a prescription drug than what they reimburse to the pharmacy and then pocket the difference.

The bill also requires PBMs to file a yearly report with the Federal Trade Commission (FTC) showing how they operate.


Lawmakers heard from a pharmacist who warned about how his customers were stuck paying more for a generic cholesterol medication due to PMB involvement.


“The PBM manipulated the patient co-pay to intentionally overpay the pharmacy, costing the patient an extra $500 dollars a year in out-of-pocket expense without the PBM contributing a penny to the transaction,” said Dr. Ryan Oftebro, owner of Kelley-Ross Pharmacy Group in Seattle, WA. “These patients would have been better off without using their insurance and that’s not right.”


The PBM industry is fighting back against the bill and alleges it does nothing to address the root cause of high prescription drug costs.

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