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► See HR 5378 Bill Summary
On a decisive 320-71 vote yesterday, the U.S. House passed a key House PBM reform package that would mandate increased PBM transparency, prohibit spread pricing and require reimbursement of pharmacies at NADAC plus a dispensing fee equal to that paid in each state's Medicaid Fee for Service program.
HR 5378, the Lower Costs, More Transparency Act, was filed earlier this year by Rep. Buddy Carter of Georgia, a former independent pharmacist and longtime champion of pharmacy causes in Congress. The legislation includes provisions of Carter's HR 1613, The Drug Price Transparency in Medicaid Act and HR 2679, the Pharmacy Benefits Manager Accountability Act. Those bills had been approved earlier by three different House committees.
“I am thrilled that the House voted to pull back the curtains on PBMs by reducing health- care costs and increasing price transparency for patients," Rep. Carter said on Monday. "Combined, my bills that were included in this landmark package will end the predatory spread pricing practice in Medicaid programs, raise reporting requirements for PBMs, and ensure pharmacists are fairly reimbursed when filling prescriptions for Medicaid beneficiaries, getting us one step closer to a health-care system that puts patients before profits.”
HR 5378 increases accountability and transparency by requiring PBMs to submit detailed reports on drugs they dispense; the wholesale cost of each drug and what pharmacies were paid; total received from patient copayments and copay assistance; all rebates, fees and incentives received, and the amounts passed through to plan sponsors; and total amount of DIR fees collected from pharmacies under Part D.
It also requires Medicare Advantage (MA) organizations to report to DHHS any common ownership in health providers, PBM and pharmacies; and the Medicare Payment Advisory Committee to report on vertical integration between MA organizations, providers, PBMs and pharmacies and how this integration affects patient access, costs, quality of care and outcomes.
The bill also ends spread pricing by barring PBMs from charging Medicaid more for a drug than they pay pharmacies and prohibits PBMs from pocketing millions of dollars in rebates by limiting their compensation to an administrative fee.
Critically, it ensures fair reimbursement under Medicaid by requiring PBMs to pay pharmacies the drug cost as measured by NADAC and a professional dispensing fee equivalent to the amount paid in the state’s Medicaid Fee for Service plan.
APRx VP of Government Affairs Michael Wright praised Carter's persistence and optimism in getting HR 5378 passed after the years of frustration he endured in trying to get Congress to act on PBM abuses.
"Rep. Carter has been the 'Godfather' of pharmacy in Congress for years," Wright said. "He has never stopped pushing hard to make this happen, even when most of Congress didn't understand these issues or even know what a PBM was. We have many more allies and supporters now, but this is really Rep. Carter's triumph."
Wright said that congressional understanding has increased greatly concerning PBMs' outsized influence on drug prices, patient choice and pharmacy reimbursement. He credited the longtime work of NCPA and other groups -- like American Pharmacies -- that have encouraged lawmakers to learn about and act on PBM abuses. And he praised American Pharmacies' Washington lobby firm -- Roberti Global -- for building and maintaining a strong relationship with Carter's office.
"We have an outstanding partner in Roberti Global," Wright said. "Their connections, influence and talent are critical in our federal efforts."
HR 5378 now goes to the Senate, which has been deliberating significant PBM reforms of its own, such as S 2973, The Modernizing & Ensuring PBM Accountability Act; and S 1339, the Pharmacy Benefit Manager Reform Act.
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