U.S. Representatives Mariannette Miller-Meeks (IA-01), Nanette Diaz Barragán (CA-44), Lori Chavez-DeRemer (OR-05), Kathy Manning (NC-06), Nicole Malliotakis (NY-11), Brad Schneider (IL-10), Tom Kean, Jr. (NJ-07) and Abigail Spanberger (VA-07) have introduced bipartisan legislation to help fix misaligned incentives in the commercial and Federal Employee Health Benefits markets that drive up drug costs for patients and employers.
H.R. 6283, the Delinking Revenue from Unfair Gouging (DRUG) Act, will break the link between the price of medicines and the fees pharmacy benefit managers (PBMs) charge, requiring PBM fees to be structured as a flat fee based on the fair market value of PBM services. H.R. 6283 is the House companion to Senate Bill S 1542, introduced by Senators Jon Tester (D-MT), Roger Marshall (R-KS), Tim Kaine (D-VA) and Mike Braun (R-IN).
Mark Blum, managing director of the PBM Accountability Project, issued the following statement:
“This critical, bipartisan legislation will finally break the link between PBM income and drug prices in the private marketplace and in the Medicare program. Today, PBMs negotiate rebates and discounts from prescription drug manufacturers and then offer preferred placement on formularies to those drugs that provide PBMs the greatest sources of income from retained rebates and discounts, extracted fees and other revenue extraction schemes. A complex set of perverse incentives motivates a few anti-competitive PBM oligopolists to conduct complex drug price arbitrage schemes at taxpayer and patient expense and steer consumers to higher-priced drugs, rather than to less expensive generics and biosimilars, as would occur in an authentically competitive market.
“This legislation addresses these perverse incentives by prohibiting PBMs from tying fees or other compensation to the price of a medicine and prevents them from deriving income from any source other than transparent, market-determined fees for bona fide services that are valued by their clients.
“This legislation is an important step to ensuring PBMs can no longer take advantage of our drug pricing system in order to profit at the expense of patients. We commend Representative Miller-Meeks, and her co-sponsors Representatives Barragán, Chavez-DeRemer, Manning, Malliotakis, Schneider, Kean and Spanberger for taking this meaningful action.
“The time is now to deliver real results, and we are hopeful that Congress will pass meaningful PBM reforms this year to ensure all patients and families can afford the medications they need.”
To learn more about the PBM issue and legislative solutions, visit pbmaccountability.org.