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PBM Transparency a Focus of New Legislation

HR 1316 would require PBMs to disclose generic drug pricing information.
Published Online: Mar 03,2017
Laurie Toich, Assistant Editor
Yesterday, Congressman Doug Collins (R-GA) introduced a bill that would require increased transparency from pharmacy benefit managers (PBMs). PBMs have recently been scrutinized for charging direct and indirect remuneration (DIR) fees to pharmacies months after the initial transaction. Many pharmacies receive bills that do not indicate which charges correspond with which transactions.
HR 1316, the Prescription Drug Price Transparency Act, would protect taxpayers and community pharmacists by demanding transparency in generic drug pricing, according to a press release from the senator.
PBMs negotiate deals with healthcare stakeholders to drive down costs, but their actions have been called into question. These companies have refused to disclose their processes for creating pharmacy reimbursement prices, according to Collins. While PBMs state that they pass savings to Medicare Part D, TRICARE, and the Federal Employees Health Benefits Program, a lack of  transparency makes it impossible to determine if the federal programs are benefiting from PBM involvement, according to a press release.
“PBMs engage in predatory practices designed to boost their own profit margins at the expense of insurers, contracting pharmacies, patients, and—in their relationships with federal programs—taxpayers,” Collins said in the release. “The lack of transparency in their operations has allowed them to control the market unjustly, with the result that these companies withhold savings that they have promised to pass on.”
Specifically, when dealing with community pharmacies, Collin alleges that PBMs alter the prices on their maximum allowable cost (MAC) lists to those below a pharmacy’s costs, which forces pharmacists to take a financial loss to serve their customers. This causes pharmacies to take on significant debt, and can result in bankruptcy.
“I’m introducing a bipartisan bill to ensure that PBMs update their MAC lists for Medicare Part D, TRICARE, and FEHBP every 7 days to protect competitive pricing and to preserve pharmacy access and choice for patients,” Collins said. “The Prescription Drug Price Transparency Act provides essential oversight to prevent waste, fraud, and the abuse of taxpayer funds and better protects patient privacy.”