Senate Committee Advances PBM Reform Bills

The Senate HELP Committee advanced four bills to increase competition and transparency in the pharmacy supply chain that are arguably the most sweeping bipartisan PBM reform bills that have moved in Congress.

The PBMRA includes a number of HR Policy recommendations and would require PBMs to annually disclose:

• The amounts paid directly or indirectly in rebates, fees, or any other type of compensation to brokers, consultants, and advisors who referred the employer plan to the PBM; and
  
  
• The amount received, or expected to be received, by a PBM in rebates, fees, alternative discounts, or other remuneration paid by other entities in the pharmacy supply chain.

Rebate pass-throughs, spread pricing and independent audits. The bill would require PBMs to remit 100% of rebate fees, alternative discounts, and other remuneration to employer plans; prohibit spread pricing (i.e., charging the plan more than it reimburses the pharmacy) beginning January 1, 2025; and enable employers to choose the auditor for their PBM audit.

PBM fiduciary study. An HR Policy-supported amendment that would require the Labor Department to study the implications of making PBMs fiduciaries under ERISA passed 21 to 0.

New step-therapy requirement for employer plans. An HR Policy-opposed amendment to include S. 652 in the PBMRA passed 20 to 1. The bill would require employer health plans to establish exceptions to medication step-therapy protocols for certain cases and likely increase employer costs.

Outlook: Senator Sanders (I-VT) repeatedly said during the markup that “this will not be the last prescription drug markup” the HELP Committee will hold this year and announced his intention to work with the GOP to move other bills to reduce drug costs. Senate Majority Leader Chuck Schumer (D-NY) also wants to have a vote on legislation to reduce drug costs as either a standalone bill or part of a larger budget bill later this year. Strong bipartisan support in committee indicates that the bills could pass in the Senate.