Radar on Drug Benefits

In the scramble to pass the “One Big Beautiful Bill Act,” PBM reform provisions targeting Medicare and Medicaid were stripped from President Donald Trump’s signature domestic policy bill.

However, proponents of industry reform are not giving up — and one source says the House of Representatives is poised to introduce a package of PBM-related policies that could finally address the issue at the federal level.

The Supreme Court’s ruling on June 27 upholding the constitutionality of the Affordable Care Act’s preventive care coverage mandate helped ensure millions of patients will continue to have access without cost-sharing to pre-exposure prophylaxis (PrEP) treatments for HIV. Jesse Dresser, a partner with law firm Frier Levitt, says the ruling means it’s “status quo” for payers and plan sponsors, but he adds that it “creates continued financial exposure” to PrEP, which is becoming a crowded market with the FDA approving another medication last month and several pharmaceutical companies developing treatments. He also notes that former President Joe Biden’s administration last October released guidance prohibiting the use of prior authorization for PrEP.

“I don’t think that the focus on PrEP is over,” says Dresser, citing the high costs associated with the medication and potential legal challenges on religious grounds. “It’s not like covering a $5 medication or something inexpensive. I foresee there being continued focus on the prescribing, dispensing and coverage of PrEP medications.”

Although high-cost prescription drugs are increasingly busting U.S. employers’ budgets, companies face significant barriers when trying to upend the pharmacy benefits management status quo, panelists said during a recent conference in Washington, D.C.

Still, firms that fail to get a handle on their prescription drug spending could end up facing legal and regulatory risks, speakers suggested during a June 24 panel discussion at the inaugural conference held by Transparency-Rx, a coalition of smaller PBMs that tout transparency business models and are pushing for industry reform.

The budget reconciliation legislation making President Donald Trump’s 2017 tax cuts permanent and sharply reducing federal spending in Medicaid and the Affordable Care Act insurance market provides drug manufacturers some relief from Medicare price controls established by the Inflation Reduction Act (IRA).

Manufacturers also will benefit from the bill’s tax provisions, which include a policy allowing for immediate expensing of domestic research and development spending through 2029.

A U.S. district court judge on July 8 ordered CVS Health Corp.’s Omnicare division to pay a total of $949 million in penalties and damages related to a whistleblower lawsuit centered on Omnicare’s prescription drug billing practices. The suit, filed by a former Omicare pharmacist in 2015, claimed the firm assigned new prescription numbers to thousands of patients in long-term care facilities without necessary paperwork and pharmacist approvals, after their original prescriptions expired or ran out of refills, Reuters reported. In doing so, the suit alleged that Omnicare — which CVS bought in 2015 — improperly billed Medicare, Medicaid and TRICARE.

CVS said in a statement to Reuters that the lawsuit “centered on a highly technical prescription dispensing recordkeeping issue that was allowed by law in many states, adding that “there was no claim in this case that any patient paid for a medication they shouldn't have or that any patient was harmed.”