Radar on Drug Benefits

Pharmacy benefit manager reform legislation co-authored by Senate Health, Education, Labor and Pensions Committee chair Bernie Sanders (I-Vt.) and ranking member Bill Cassidy (R-La.) addresses the hot-button issue of rebates but not in the way biopharma manufacturers are hoping for.

It would require PBMs to remit “100% of rebates, fees, alternative discounts and other remunerations received…that are related to utilization of drugs under such health plan or health insurance coverage to the group health plan.” Biopharma companies have for years been pushing for a policy that mandates rebates be passed through, not with health plans as envisioned by the legislation, but with plan enrollees at the point-of-sale as a better way to “share the savings.”

The pharmaceutical and health products industry poured over a record amount — more than $373.7 million — into lobbying and outspent all other industries in 2022, according to data compiled by OpenSecrets.

During the 2021-2022 election cycle, the pharma/health products industry bucked its historical trend of favoring Republicans and distributed around 60% of donated campaign funds to Democratic lawmakers. Among the 20 lawmakers who received the most contributions from the industry during the election cycle, 14 are Democrats. Sen. Raphael Warnock (D-Ga.) topped the list, receiving over $764,000.

Congressional interest in PBM reform may turn into comprehensive legislation as soon as this summer, D.C. insiders tell AIS Health, a division of MMIT, and possibly has enough bipartisan support to pass both chambers. Lobbyists representing employer plan sponsors say that measures including a requirement that PBMs be fiduciaries to plan sponsors and members, a federal ban on spread pricing, and mandatory price transparency disclosures are all under serious discussion. 

Several Senate committees have made moves to advance PBM legislation. The Finance Committee held a hearing on PBMs at the end of March; the Commerce Committee has advanced legislation; and the Health, Education, Labor and Pensions (HELP) Committee seems poised to mark up legislation this month, according to press reports. In the Senate, which is controlled by Democrats, several bills have sponsors from both parties, and the HELP Committee markup will feature members of both parties, led by committee chair Sen. Bernie Sanders (I-Vt., who caucuses with Democrats) and ranking member Sen. Bill Cassidy (R-La.).  

The failure of a federal workers’ compensation program to properly manage prescription drug use and costs resulted in approximately $321 million in overspending on medications and “claimants receiving thousands of inappropriate prescriptions and potentially lethal drugs” like fentanyl, according to a new report from a government watchdog agency. 

The Office of Workers’ Compensation Program (OWCP) said in the report, which reviewed data from fiscal years 2015-2020, that its hiring of a PBM in 2021 will address many of the concerns identified by auditors. But one consultant who participated in the audit contends that move will “absolutely not” fix the myriad oversight issues that were uncovered. In addition, the PBM’s contract does not require it to share any drug rebates with the Federal Employees Compensation Act (FECA) program — which makes the program an “outlier” among other federal payers, Joseph Paduda tells AIS Health, a division of MMIT.